UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number   811-23403

Principal Diversified Select Real Asset Fund

(Exact name of registrant as specified in charter)

 801 Grand Avenue, Des Moines, IA 50309

(Address of principal executive offices)                                                         (Zip code)

Principal Global Investors, LLC, 801 Grand Avenue, Des Moines, IA 50309

(Name and address of agent for service)

Registrant’s telephone number, including area code: 515-235-1719

Date of fiscal year end: March 31, 2022

Date of reporting period: March 31, 2022

ITEM 1 – REPORT TO STOCKHOLDERS

Principal

Diversified

Select

Real

Asset

Fund

Annual

Report

March

31,

2022

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Table

of

Contents

Not

FDIC

or

NCUA

insured

May

lose

value

•

Not

a

deposit

•

No

bank

or

credit

union

guarantee

Not

insured

by

any

Federal

government

agency

Economic

&

Financial

Market

Review

1

Important

Fund

Information

2

Principal

Diversified

Select

Real

Asset

Fund

(unaudited)

3

Financial

Statements

4

Notes

to

Financial

Statements

8

Schedule

of

Investments

17

Financial

Highlights

(includes

performance

information)

24

Report

of

Independent

Registered

Public

Accounting

Firm

26

Shareholder

Expense

Example

27

Supplemental

Information

28

1

Economic

&

Financial

Market

Review

As

COVID

disruptions

gradually

abated,

global

economic

growth

remained

solid

in

2021.

U.S.

real

Gross

Domestic

Product

(GDP)

grew

at

an

annualized

rate

of

5.7%

in

2021.

Europe

and

Japan

showed

modest

growth

but

were

less

prominent

than

the

U.S.,

with

growth

rates

of

2.9%

and

1.8%

respectively.

China

GDP

growth

slowed

down

on

deleveraging

policies

and

intensified

regulations,

ending

the

year

with

8.1%

growth.

As

of

March

31,

2022,

Global

manufacturing

Purchasing

Manager’

Index

(PMI)

remained

well

above

50

in

the

last

twelve

months

(a

number

above

50

means

manufacturing

activity

is

expanding

and

number

below

50

indicates

contraction),

and

the

latest

reading

as

of

March

2022

is

54.2,

with

85%

of

the

countries

tracked

showed

PMIs

higher

than

50.

Strong

economic

growth

remained

desynchronized:

GDP-

weighted

developed

market

PMI

is

56.3,

much

higher

than

the

50.5

of

emerging

market

PMI.

Following

the

gradual

phaseout

of

COVID

related

fiscal

support,

monetary

policies

also

turned

more

and

more

hawkish

as

high

inflation

pressures

weighed

in.

As

of

March,

global

policy

rates

rose

by

66

bps

in

the

last

twelve

months

as

global

central

banks

began

raising

interest

rates.

The

United

States

Federal

Reserve

started

hiking

rates

in

March

and

is

expected

to

hike

multiples

times

this

year.

Supply

chain

disruptions

and

strong

demand

recovery

caused

shortages

in

global

goods,

which

pushed

inflation

higher.

Slow

capital

expenditures,

complicated

by

geopolitical

disruptions,

led

commodities

prices

to

rally

sharply,

further

fueling

inflation.

Global

inflation

increased

from

2.0%

in

March

2021

to

5.0%

in

February

2022.

Market

implied

inflation

expectations

(represented

by

U.S.

5

Year

breakeven

inflation

rates)

increased

from

2.6

in

March

of

2021

to

3.2

in

March

of

2022.

Global

earnings

growth

remained

quite

strong

in

the

last

twelve

months

ending

March

2022

although

down

from

peak

levels

as

base

effects

kicked

in.

Compared

to

same

time

last

year,

MSCI

All

Country

World

Index

(ACWI)

trailing

twelve

months

earnings

per

share

(TTM

EPS)

grew

by

47%.

MSCI

World

TTM

EPS

increased

by

52%,

more

than

double

MSCI

EM’s

25%.

Within

developed

markets,

MSCI

Europe

delivered

the

highest

earnings

growth

of

132%

following

a

more

severe

decline

in

2020.

S&P

500

earnings

growth

was

more

modest

at

40%,

with

higher

earnings

growth

in

value

stocks

versus

growth

stocks.

Within

emerging

markets,

MSCI

China

TTM

EPS

lagged

with

11%

growth

in

the

last

twelve

months,

as

of

the

end

of

March.

Global

equities

outperformed

global

fixed

income

over

the

last

year.

As

of

March

31,

2022,

in

USD

terms,

MSCI

ACWI

recorded

7%

gains

year-over-year

while

Bloomberg

Global

Aggregate

Corporate

Index

ended

-6%

lower.

Within

equities,

developed

markets

outperformed

emerging

markets

by

21%,

and

U.S.

outperformed

developed

market

ex-U.S.

by

11%.

Among

major

markets,

China

was

the

worst

performer

with

-33%

loss,

bringing

MSCI

EM

down

to

-11%.

Within

the

U.S.,

large

cap

and

growth

outperformed.

Bloomberg

U.S.

Treasury

Index

delivered

-4%

loss

as

U.S.

10-year

treasury

yield

rising

from

1.74%

to

2.34%.

Global

high

yield

bonds

beat

global

investment

corporate

bonds

and

global

treasury

bonds

by

2%

and

3%

respectively.

Commodity

prices

represented

by

the

S&P

GSCI

Total

Return

Index

increased

by

65%,

and

Nymex

crude

oil

rose

from

59.2

to

100.3

USD/barrel.

*

Unless

otherwise

stated,

data

sources

are

Bloomberg,

FactSet,

and

Principal

Global

Asset

Allocation.

Data

as

of

March

31,

2022.

Index

descriptions:

MSCI

All

Country

World

Index

(ACWI)

Index

includes

large

and

mid

cap

stocks

across

developed

and

emerging

market

countries.

MSCI

China

Index

captures

large

and

mid

cap

representation

across

China

A

shares,

H

shares,

B

shares,

Red

chips,

P

chips

and

foreign

listings

(e.g.

ADRs).

MSCI

Emerging

Markets

Index

consists

of

large

and

mid

cap

companies

across

24

countries

and

represents

10%

of

the

world

market

capitalization.

The

index

covers

approximately

85%

of

the

free

float-adjusted

market

capitalization

in

each

country

in

each

of

the

24

countries.

MSCI

World

Index

captures

large

and

mid

cap

representation

across

23

Developed

Markets

(DM)

countries.

Bloomberg

Global

Aggregate

Corporate

Index

is

a

flagship

measure

of

global

investment

grade

debt

from

twenty-

four

local

currency

markets.

This

multi-currency

benchmark

includes

treasury,

government-related,

corporate

and

securitized

fixed-rate

bonds

from

both

developed

and

emerging

markets

issuers.

Bloomberg

U.S.

Treasury

Index

measures

US

dollar-denominated,

fixed-rate,

nominal

debt

issued

by

the

U.S.

Treasury.

S&P

GSCI

Total

Return

Index

is

an

index

of

24

exchange-traded

futures

contracts

that

represent

a

large

portion

of

the

global

commodities

market.

2

Important

Fund

Information

Securities

described

in

the

fund

commentary

may

no

longer

be

held

in

the

fund.

The

line

graph

on

the

following

page

illustrates

the

growth

of

a

hypothetical

$10,000

investment.

The

illustration

is

based

on

performance

of

Class

Y

shares.

The

performance

of

other

share

classes

will

differ.

Investment

results

shown

represent

historical

performance

and

do

not

guarantee

future

results.

Your

investment’s

returns

and

principal

values

will

fluctuate

with

changes

in

interest

rates

and

other

market

conditions

so

the

value,

when

redeemed,

may

be

worth

more

or

less

than

original

costs.

Current

performance

may

be

lower

or

higher

than

the

performance

shown.

For

more

information,

including

the

most

recent

month-end

performance,

call

your

financial

professional,

or

call

800-222-5852.

A

sales

charge

may

apply

as

follows:

Class

A

shares:

maximum

up-front

sales

charges

on

sales

based

on

declining

rates

which

begin

at

5.75%.

Institutional

and

Class

Y

Shares

do

not

have

a

sales

charge.

See

the

prospectus

for

details.

Performance

listed

with

sales

charge

reflects

the

maximum

sales

charge.

.

3

Principal

Diversified

Select

Real

Asset

Fund

Investment

Advisor:

Principal

Global

Investors,

LLC

Sub-Advisors:

Clearbridge

Investments

(North

America)

Pty

Limited;

Principal

Real

Estate

Investors,

LLC;

Tortoise

Capital

Advisors,

L.L.C

Average

Annual

Total

Returns*

as

of

March

31,

2022

What

contributed

to

or

detracted

from

Fund

performance

during

the

fiscal

year?

The

Fund

seeks

to

provide

long-term

total

return

(after

Fund

fees

and

expenses)

in

excess

of

inflation.

Under

normal

circumstances,

the

Fund

invests

at

least

80%

of

its

net

assets,

plus

any

borrowings

for

investment

purposes,

in

real

assets

and

real

asset

companies.

Real

assets

include,

without

limitation,

investments

related

to

real

estate,

agriculture,

infrastructure,

energy,

natural

resources,

and

timber.

Real

asset

companies

include

companies

that

primarily

own,

explore,

mine,

process

or

otherwise

develop

real

assets.

The

Fund

invests

in

real

assets

and

real

asset

companies

directly,

and

indirectly

through

other

entities,

including

private

institutional

investment

funds

("Private

Funds")

that

pursue

these

strategies.

While

every

sleeve

contributed

positively

to

performance

during

the

fiscal

year,

the

Fund's

listed

infrastructure

sleeves

and

the

private

investment

portfolio

were

the

largest

contributors.

The

essential

assets

sleeve,

sub-advised

by

Tortoise,

was

the

largest

single

contributor

to

the

Fund's

performance.

Tortoise's

portfolio

benefited

from

exposure

to

energy

infrastructure

companies,

which

rose

sharply

alongside

oil

and

gas

prices.

The

global

listed

infrastructure

sleeve,

sub-advised

by

ClearBridge

,

also

contributed

significantly.

ClearBridge

outperformed

the

broad

infrastructure

universe

primarily

through

strong

stock

selection,

especially

in

airports

and

electric

utilities.

The

Fund's

private

investment

portfolio,

which

now

comprises

over

half

of

the

Fund's

assets,

delivered

solid

positive

results

in

every

quarter

of

the

fiscal

year.

Positive

returns

in

the

private

investment

portfolio

were

driven

by

every

segment:

the

portfolio

saw

gains

in

private

real

estate,

private

infrastructure,

timberland,

and

farmland.

No

sleeves

within

the

Fund

detracted

from

performance

in

absolute

terms.

The

smallest

contributor

in

absolute

terms

was

the

Fund's

commercial

mortgage-backed

securities

sleeve,

sub-advised

by

Principal

Real

Estate

Investors,

which

gained

a

very

small

amount,

in

an

environment

of

economic

recovery,

combined

with

sharply

higher

interest

rates.

Value

of

a

$10,000

Investment*

June

25,

2019

-

March

31,

2022

1-Year

Since

Inception

Inception

Date

Class

A

Shares

Excluding

Sales

Charge

12.58%

8.01%

6/25/19

Including

Sales

Charge

6.10%

5.72%

Class

Y

Shares

13.13%

8.55%

6/25/19

Institutional

Shares

12.93%

8.33%

6/25/19

*Performance

assumes

reinvestment

of

all

dividends

and

capital

gains.

Performance

does

not

reflect

the

impact

of

federal,

state,

or

municipal

taxes.

If

it

did,

performance

would

be

lower.

**Performance

shown

for

the

benchmark

assumes

reinvestment

of

all

dividends

and

distributions.

Indices

are

unmanaged,

and

individuals

cannot

invest

directly

in

an

index.

Statement

of

Assets

and

Liabilities

March

31,

2022

4

See

accompanying

notes.

Amounts

in

thousands,

except

per

share

amounts

Principal

Diversified

Select

Real

Asset

Fund

Investment

in

securities--at

cost

......................................................................................................................

$

166,235‌

Assets

Investment

in

securities--at

value 

......................................................................................................................

$

187,928‌

Receivables:

Dividends

and

interest

.............................................................................................................................

477‌

Expense

reimbursement

from

Manager

...........................................................................................................

85‌

Investment

securities

sold

.........................................................................................................................

1,154‌

Total

Assets  

189,644‌

Liabilities

Accrued

management

and

investment

advisory

fees

....................................................................................................

263‌

Accrued

transfer

agent

fees

.............................................................................................................................

36‌

Accrued

directors'

expenses

.............................................................................................................................

1‌

Accrued

professional

fees

...............................................................................................................................

207‌

Accrued

other

expenses

.................................................................................................................................

36‌

Cash

overdraft

...........................................................................................................................................

107‌

Payables:

Investment

securities

purchased

..................................................................................................................

932‌

Total

Liabilities  

1,582‌

Net

Assets

Applicable

to

Outstanding

Shares

........................................................................................................

$

188,062‌

Net

Assets

Consist

of:

Capital

shares

and

additional

paid-in-capital

...........................................................................................................

$

162,324‌

Total

distributable

earnings

(accumulated

loss)

.........................................................................................................

25,738‌

Total

Net

Assets 

$

188,062‌

Capital

Stock

(par

value:

$.01

per

share):

Net

Asset

Value

Per

Share:

Class

A

:

Net

Assets

......................................................................................................................................

$

372‌

Shares

Issued

and

Outstanding

....................................................................................................................

13‌

Net

Asset

Value

per

share

.........................................................................................................................

$

28

.09‌

(a)

Maximum

Offering

Price

..........................................................................................................................

$

29

.80‌

Class

Y

:

Net

Assets

......................................................................................................................................

$

187,063‌

Shares

Issued

and

Outstanding

....................................................................................................................

6,607‌

Net

Asset

Value

per

share

.........................................................................................................................

$

28

.31‌

Institutional

:

Net

Assets

.................................................................................................................................

$

627‌

Shares

Issued

and

Outstanding

....................................................................................................................

22‌

Net

Asset

Value

per

share

.........................................................................................................................

$

28

.15‌

(a)

Redemption

price

per

share

is

equal

to

net

asset

value

per

share

less

any

applicable

contingent

deferred

sales

charge.

Statement

of

Operations

Year

ended

March

31,

2022

5

See

accompanying

notes.

Amounts

in

thousands

Principal

Diversified

Select

Real

Asset

Fund

Net

Investment

Income

(Loss)

Income:

Dividends

..............................................................................................................................................

$

4,936‌

Withholding

tax

.......................................................................................................................................

(

215‌

)

Interest

.................................................................................................................................................

728‌

Other

income

..........................................................................................................................................

3‌

Total

Income

5,452‌

Expenses:

Management

and

investment

advisory

fees

...........................................................................................................

2,987‌

Distribution

f

ees

-

Class

A

............................................................................................................................

1‌

Registration

fees

-

Class

A

............................................................................................................................

16‌

Registration

fees

-

Class

Y

............................................................................................................................

17‌

Registration

fees

-

Institutional

.......................................................................................................................

16‌

Shareholder

reports

-

Class

A

.........................................................................................................................

8‌

Shareholder

reports

-

Institutional

....................................................................................................................

5‌

Transfer agent

fees

-

Class

A

..........................................................................................................................

51‌

Transfer agent

fees

-

Class

Y

..........................................................................................................................

45‌

Transfer agent

fees

-

Institutional

.....................................................................................................................

59‌

Custodian

fees

.........................................................................................................................................

40‌

Directors'

expenses

....................................................................................................................................

7‌

Professional fees

......................................................................................................................................

283‌

Other

expenses

........................................................................................................................................

81‌

Total

Gross

Expenses

3,616‌

Less: Reimbursement

from

Manager

.................................................................................................................

598‌

Less:

Reimbursement

from

Manager

-

Class

A

.......................................................................................................

76‌

Less:

Reimbursement

from

Manager

-

Class

Y

.......................................................................................................

373‌

Less:

Reimbursement

from

Manager

-

Institutional

..................................................................................................

80‌

Total

Net

Expenses

2,489‌

Net

Investment

Income

(Loss)

2,963‌

Net

Realized

and

Unrealized

Gain

(Loss)

on

investments

and

foreign

currencies

Net

realized

gain

(loss)

from:

Investment

transactions

...............................................................................................................................

11,558‌

Foreign

currency

transactions

.........................................................................................................................

(

45‌

)

Net

change

in

unrealized

appreciation/(depreciation)

of:

Investments

............................................................................................................................................

9,833‌

Translation

of

assets

and

liabilities

in

foreign

currencies

.............................................................................................

(

1‌

)

Net

Realized

and

Unrealized

Gain

(Loss)

on

investments

and

foreign

currencies

21,345‌

Net

Increase

(Decrease)

in

Net

Assets

Resulting

from

Operations

$

24,308‌

Statement

of

Changes

in

Net

Assets

6

See

accompanying

notes.

Amounts

in

thousands

Principal

Diversified

Select

Real

Asset

Fund

Year

Ended

March

31,

2022

Year

Ended

March

31,

2021

Operations

Net

investment

income

(loss)

..........................................................................................................

$

2,963‌

$

3,681‌

Net

realized

gain

(loss)

on

investments

and

foreign

currencies

.......................................................................

11,513‌

4,476‌

Net

change

in

unrealized

appreciation/(depreciation)

of

investments

and

foreign

currencies

.........................................

9,832‌

38,287‌

Net

Increase

(Decrease)

in

Net

Assets

Resulting

from

Operations

24,308‌

46,444‌

Dividends

and

Distributions

to

Shareholders

From

net

investment

income

and

net

realized

gain

on

investments

...................................................................

(12,169‌)

(4,772‌)

Total

Dividends

and

Distributions

(12,169‌)

(4,772‌)

Capital

Share

Transactions

Net

increase

(decrease)

in

capital

share

transactions

..................................................................................

12,515‌

22,841‌

Total

Increase

(Decrease)

in

Net

Assets

24,654‌

64,513‌

Net

Assets

Beginning

of

period

....................................................................................................................

163,408‌

98,895‌

End

of

period

..........................................................................................................................

$

188,062‌

$

163,408‌

Class

A

Class

Y

Institutional

Capital

Share

Transactions:

Year

Ended

March

31,

2022

Dollars:

Sold

.....................................................................................

$

50‌

$

–‌

$

301‌

Reinvested

................................................................................

23‌

12,120‌

26‌

Redeemed

.................................................................................

–‌

–‌

(5‌)

Net

Increase

(Decrease)

$

73‌

$

12,120‌

$

322‌

Shares:

Sold

.....................................................................................

2‌

–‌

10‌

Reinvested

................................................................................

1‌

443‌

1‌

Redeemed

.................................................................................

–‌

–‌

–‌

Net

Increase

(Decrease)

3‌

443‌

11‌

Year

Ended

March

31,

2021

Dollars:

Sold

.....................................................................................

$

–‌

$

18,069‌

$

–‌

Reinvested

................................................................................

8‌

4,756‌

8‌

Net

Increase

(Decrease)

$

8‌

$

22,825‌

$

8‌

Shares:

Sold

.....................................................................................

–‌

887‌

–‌

Reinvested

................................................................................

–‌

196‌

1‌

Net

Increase

(Decrease)

–‌

1,083‌

1‌

Dividends

and

Distributions

to

Shareholders:

Year

Ended

March

31,

2022

From

net

investment

income

and

net

realized

gain

on

investments

.........................................

$

(23‌)

$

(12,120‌)

$

(26‌)

Total

Dividends

and

Distributions

$

(23‌)

$

(12,120‌)

$

(26‌)

Year

Ended

March

31,

2021

From

net

investment

income

and

net

realized

gain

on

investments

.........................................

$

(8‌)

$

(4,756‌)

$

(8‌)

Total

Dividends

and

Distributions

$

(8‌)

$

(4,756‌)

$

(8‌)

Statement

of

Cash

Flows

Year

Ended

March

31,

2022

7

See

accompanying

notes.

Amounts

in

thousands

Principal

Diversified

Select

Real

Asset

Fund

Cash

Flows

from

Operating

Activities:

Net increase

in

net

assets

from

operations

..............................................................................

$

24,308

Adjustments

to

reconcile

net

increase

in

net

assets

from

operations

to

net

cash

used

in

operating

activities:

Purchase

of

investment

securities

...............................................................................

(81,515)

Proceeds

from

sale

of

investment

securities

........................................................................

77,749

Net

sales

(purchases)

of

short

term

securities

.......................................................................

(522)

Net

accretion

of

bond

discounts

and

amortization

of

premiums

..........................................................

941

Net

realized

gain

(loss)

from

investments

..........................................................................

(11,558)

Change

in

unrealized

(appreciation)

depreciation

on

investments

.........................................................

(9,833

)

(Increase)

decrease

in

dividends

and

interest

receivable

................................................................

(13)

(Increase)

decrease

in

investment

securities

sold

.....................................................................

(935)

Increase

(decrease)

in

accrued

fees,

expenses,

and

expense

reimbursement

from

Manager

.......................................

76

Increase

(decrease)

in

investment

securities

purchased

................................................................

890

Net

cash

used

in

operating

activities

(412)

Cash

Flows

from

Financing

Activities:

Increase

(decrease)

in

cash

overdraft

.............................................................................

60

Proceeds

from

shares

sold

.....................................................................................

351

Payments

on

shares

redeemed

..................................................................................

(5)

Net

cash

provided

by

financing

activities

406

Net

increase

(decrease)

in

cash

.................................................................................

(6)

Cash:

Beginning

of

year

..........................................................................................

$

6

End

of

year

...............................................................................................

$

—

Supplemental

Disclosure

of

Cash

Flow

Information:

Reinvestment

of

dividends

and

distributions

.......................................................................

$

12,169

Notes

to

Financial

Statements

Principal

Diversified

Select

Real

Asset

Fund

March

31,

2022

8

1.

Organization

Principal

Diversified

Select

Real

Asset

Fund

(the

"Fund")

is

registered

under

the

Investment

Company

Act

of

1940,

as

amended,

(the

“1940

Act”)

as

a

diversified,

closed-end

management

investment

company.

The

Fund

continuously

offers

three

classes

of

shares:

Class

A,

Class

Y,

and

Institutional

Class.

The

Fund

was

organized

as

a

Delaware

statutory

trust

on

September

21,

2018

pursuant

to

an

Agreement

and

Declaration

of

Trust

governed

by

the

State

of

Delaware.

Principal

Global

Investors,

LLC

(the

“Manager”)

serves

as

the

Fund’s

manager

and

advisor.

The

Fund

is

structured

as

an

interval

fund,

meaning

it

conducts

quarterly

repurchase

offers

of

no

less

than

5%

and

no

more

than

25%

of

the

Fund’s

outstanding

shares

at

net

asset

value.

Repurchase

offers

of

more

than

5%

are

made

solely

at

the

discretion

of

the

Fund’s

Board

of

Trustees

(the

“Board”),

and

shareholders

should

not

rely

on

any

expectation

of

repurchase

offers

being

made

in

excess

of

5%.

Shareholders

should

consider

the

Fund’s

shares

illiquid.

The

Fund’s

shares

are

not

listed

on

any

national

securities

exchange

and

are

not

publicly

traded.

There

is

currently

no

secondary

market

for

the

shares,

and

the

Fund

expects

that

no

secondary

market

will

develop.

An

unlimited

number

of

shares

has

been

authorized

under

the

Agreement

and

Declaration

of

Trust.

Only

eligible

purchasers

can

buy

shares

of

the

Fund

in

that

share

class.

The

Manager

and

Principal

Funds

Distributor,

Inc.

(the

“Distributor”)

(an

affiliate

of

the

Manager),

the

principal

distributor

of

the

Fund,

reserve

the

right

to

broaden,

limit,

and

change

the

designation

of

eligible

purchasers

without

notice.

Shares

of

the

Fund

are

only

sold

in

U.S.

jurisdictions.

Subject

to

eligibility

and

minimum

initial

investment

requirements,

shares

of

the

Fund

may

be

purchased

directly

or

through

intermediary

organizations,

such

as

broker-dealers,

insurance

companies,

plan

sponsors,

third

party

administrators,

and

retirement

plans.

Minimum

initial

investment

requirements

are

$25,000

for

Class

A

shares

and

$100,000

for

Class

Y

and

Institutional

Class

shares.

The

Fund

is

an

investment

company

and

applies

specialized

accounting

and

reporting

under

Accounting

Standards

Codification

Topic

946,

Financial

Services

-

Investment

Companies

.

The

Fund

has

not

provided

financial

support

and

is

not

contractually

required

to

provide

financial

support

to

any

investee.

All

classes

of

shares

of

the

Fund

represent

interests

in

the

same

portfolio

of

investments

and

will

vote

together

as

a

single

class

except

where

otherwise

required

by

law

or

as

determined

by

the

Board.

In

addition,

the

Board

declares

separate

dividends

on

each

class

of

shares.

The

Fund

may

offer

additional

classes

of

shares

in

the

future.

2.

Significant

Accounting

Policies

The

preparation

of

financial

statements

in

conformity

with

U.S.

generally

accepted

accounting

principles

(“U.S.

GAAP”)

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

and

disclosure

of

contingent

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

reported

amounts

of

revenues

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

The

following

summarizes

the

significant

accounting

policies

of

the

Fund:

Security

Valuation.

The

Fund

values

securities,

including

exchange-traded

funds,

for

which

market

quotations

are

readily

available

at

fair

value,

which

is

determined

using

the

last

reported

sale

price.

If

no

sales

are

reported,

as

is

regularly

the

case

for

some

securities

traded

over-

the-counter,

securities

are

valued

using

the

last

reported

bid

price

or

an

evaluated

bid

price

provided

by

a

pricing

service.

Pricing

services

use

modeling

techniques

that

incorporate

security

characteristics

such

as

current

quotations

by

broker/dealers,

coupon,

maturity,

quality,

type

of

issue,

trading

characteristics,

other

yield

and

risk

factors,

and

other

market

conditions

to

determine

an

evaluated

bid

price.

When

reliable

market

quotations

are

not

considered

to

be

readily

available,

which

may

be

the

case,

for

example,

with

respect

to

restricted

securities,

certain

debt

securities,

preferred

stocks,

and

foreign

securities,

the

investments

are

valued

at

their

fair

value

as

determined

in

good

faith

by

the

Manager

under

procedures

established

and

periodically

reviewed

by

the

Board.

The

Fund

invests

in

other

publicly

traded

investment

funds

which

are

valued

at

the

respective

fund’s

net

asset

value.

In

addition,

the

Fund

invests

a

portion

of

its

assets

in

private

investment

funds

which

are

valued

at

fair

value

based

upon

the

net

asset

value

reported

on

a

periodic

basis.

In

the

event

that

a

net

asset

value

is

not

provided

by

a

private

investment

fund

following

the

end

of

the

period,

the

Fund’s

fair

valuation

procedures

will

be

followed.

The

appropriateness

of

the

fair

value

of

these

securities

is

monitored

by

the

Manager.

The

value

of

foreign

securities

used

in

computing

the

net

asset

value

per

share

is

generally

determined

as

of

the

close

of

the

foreign

exchange

where

the

security

is

principally

traded.

Events

that

occur

after

the

close

of

the

applicable

foreign

market

or

exchange

but

prior

to

the

calculation

of

the

Fund’s

net

asset

values

are

reflected

in

the

Fund’s

net

asset

values

and

these

securities

are

valued

at

fair

value

as

determined

in

good

faith

by

the

Manager

under

procedures

established

and

periodically

reviewed

by

the

Board.

Many

factors,

provided

by

independent

pricing

services,

are

reviewed

in

the

course

of

making

a

good

faith

determination

of

a

security’s

fair

value,

including,

but

not

limited

to,

price

movements

in

American

depository

receipts

(“ADRs”),

futures

contracts,

industry

indices,

general

indices,

and

foreign

currencies.

Notes

to

Financial

Statements

Principal

Diversified

Select

Real

Asset

Fund

March

31,

2022

9

To

the

extent

the

Fund

invests

in

foreign

securities

listed

on

foreign

exchanges

which

trade

on

days

on

which

the

Fund

does

not

determine

net

asset

values,

for

example

weekends

and

other

customary

national

U.S.

holidays,

the

Fund’s

net

asset

values

could

be

significantly

affected

on

days

when

shareholders

cannot

purchase

or

redeem

shares.

Certain

securities

issued

by

companies

in

emerging

market

countries

may

have

more

than

one

quoted

valuation

at

any

given

point

in

time,

sometimes

referred

to

as

a

“local”

price

and

a

“premium”

price.

The

premium

price

is

often

a

negotiated

price,

which

may

not

consistently

represent

a

price

at

which

a

specific

transaction

can

be

effected.

It

is

the

policy

of

the

Fund

to

value

such

securities

at

prices

at

which

it

is

expected

those

shares

may

be

sold,

and

the

Manager

or

any

sub-advisor

is

authorized

to

make

such

determinations

subject

to

such

oversight

by

the

Board

as

may

occasionally

be

necessary.

Currency

Translation.

Foreign

holdings

are

translated

to

U.S.

dollars

using

the

exchange

rate

at

the

daily

close

of

the

New

York

Stock

Exchange.

The

identified

cost

of

the

Fund’s

holdings

is

translated

at

approximate

rates

prevailing

when

acquired.

Income

and

expense

amounts

are

translated

at

approximate

rates

prevailing

when

received

or

paid,

with

daily

accruals

of

such

amounts

reported

at

approximate

rates

prevailing

at

the

date

of

valuation.

Since

the

carrying

amount

of

the

foreign

securities

is

determined

based

on

the

exchange

rate

and

market

values

at

the

close

of

the

period,

it

is

not

practicable

to

isolate

that

portion

of

the

results

of

operations

arising

as

a

result

of

changes

in

the

foreign

exchange

rates

from

the

fluctuations

arising

from

changes

in

the

market

prices

of

securities

during

the

period.

Net

realized

foreign

exchange

gains

or

losses

arise

from

sales

of

foreign

currencies,

currency

gains

or

losses

realized

between

trade

and

settlement

dates

on

security

transactions,

and

the

difference

between

the

amount

of

dividends,

interest

income,

interest

expense,

and

foreign

withholding

taxes

recorded

on

the

books

and

the

U.S.

dollar

equivalent

of

the

amounts

actually

received

or

paid.

Net

unrealized

appreciation

(depreciation)

on

translation

of

assets

and

liabilities

in

foreign

currencies

arise

from

changes

in

the

exchange

rate

relating

to

assets

and

liabilities,

other

than

investments

in

securities,

purchased

and

held

in

non-U.S.

denominated

currencies.

As

of

March

31,

2022,

the

Fund

held

securities

denominated

in

foreign

currencies.

None

of

the

individual

foreign

currencies

exceeded

5%

of

the

Fund’s

net

assets.

Income

and

Investment

Transactions.

The

Fund

records

investment

transactions

on

a

trade

date

basis.

Trade

date

for

senior

floating

rate

interests

purchased

in

the

primary

market

is

considered

the

date

on

which

the

loan

allocations

are

determined.

Trade

date

for

senior

floating

rate

interests

purchased

in

the

secondary

market

is

the

date

on

which

the

transaction

is

entered

into.

The

identified

cost

basis

has

been

used

in

determining

the

net

realized

gain

or

loss

from

investment

transactions

and

unrealized

appreciation

or

depreciation

of

investments.

The

Fund

records

dividend

income

on

the

ex-dividend

date,

except

dividend

income

from

foreign

securities

whereby

the

ex-dividend

date

has

passed;

such

dividends

are

recorded

as

soon

as

the

Fund

is

informed

of

the

ex-dividend

date.

Interest

income

is

recognized

on

an

accrual

basis.

Discounts

and

premiums

on

securities

are

accreted/amortized,

respectively,

on

the

level

yield

method

over

the

expected

lives

of

the

respective

securities.

Callable

debt

securities

purchased

at

a

premium

are

amortized

to

the

earliest

call

date

and

to

the

callable

amount,

if

other

than

par.

The

Fund

allocates

all

income

and

realized

and

unrealized

gains

or

losses

on

a

daily

basis

to

each

class

of

shares

based

upon

the

relative

proportion

of

the

value

of

shares

outstanding

of

each

class.

Distributions

from

Real

Estate

Investment

Trusts

(“REITs”)

and

private

investment

funds

may

be

characterized

as

ordinary

income,

net

capital

gain,

or

return

of

capital

to

the

Fund.

The

proper

characterization

of

distributions

from

REITs

and

private

investment

funds

is

generally

not

known

until

after

the

end

of

each

calendar

year.

As

such,

estimates

are

used

in

reporting

the

character

of

income

and

distributions

for

financial

statement

purposes.

Expenses.

Expenses

directly

attributed

to

the

Fund

are

charged

to

the

Fund.

Other

expenses

not

directly

attributed

to

the

Fund

are

apportioned

among

the

registered

investment

companies

managed

by

the

Manager.

Management

fees

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

the

value

of

shares

outstanding

of

each

class.

Expenses

specifically

attributable

to

a

particular

class

are

charged

directly

to

such

class

and

are

included

separately

in

the

statement

of

operations.

Dividends

and

Distributions

to

Shareholders.

Dividends

and

distributions

to

shareholders

of

the

Fund

are

recorded

on

the

ex-dividend

date.

Dividends

and

distributions

to

shareholders

from

net

investment

income

and

net

realized

gain

from

investments

are

determined

in

accordance

with

federal

tax

regulations,

which

may

differ

from

U.S.

GAAP.

These

differences

are

primarily

due

to

differing

treatments

for

foreign

currency

transactions,

REITs,

passive

foreign

investment

companies,

partnership

investments,

and

losses

deferred

due

to

wash

sales.

Permanent

book

and

tax

basis

differences

are

reclassified

within

the

capital

accounts

based

on

federal

tax-basis

treatment;

temporary

differences

do

not

require

reclassification.

To

the

extent

dividends

and

distributions

exceed

current

and

accumulated

earnings

and

profits

for

federal

income

tax

purposes,

they

are

reported

as

return

of

capital

distributions.

2.

Significant

Accounting

Policies

(continued)

Notes

to

Financial

Statements

Principal

Diversified

Select

Real

Asset

Fund

March

31,

2022

10

Federal

Income

Taxes.

No

provision

for

federal

income

taxes

is

considered

necessary

because

the

Fund

intends

to

qualify

as

a

“regulated

investment

company”

under

the

Internal

Revenue

Code

and

intends

to

distribute

each

year

substantially

all

of

its

net

investment

income

and

realized

capital

gains

to

shareholders.

Management

evaluates

tax

positions

taken

or

expected

to

be

taken

in

the

course

of

preparing

the

Fund’s

tax

returns

to

determine

whether

it

is

“more

likely

than

not”

that

each

tax

position

would

be

sustained

upon

examination

by

a

taxing

authority

based

on

the

technical

merits

of

the

position.

Tax

positions

not

deemed

to

meet

the

“more

likely

than

not”

threshold

would

be

recorded

as

a

tax

benefit

or

expense

in

the

current

year.

During

the

year

ended

March

31,

2022,

the

Fund

did

not

record

any

such

tax

benefit

or

expense

in

the

accompanying

financial

statements.

The

statute

of

limitations

remains

open

for

the

last

three

years,

once

a

return

is

filed.

No

examinations

are

in

progress

at

this

time.

Foreign

Taxes.

The

Fund

may

be

subject

to

foreign

income

taxes

imposed

by

certain

countries

in

which

it

invests.

Foreign

income

taxes

are

accrued

by

the

Fund

as

a

reduction

of

income.

These

amounts

are

shown

as

withholding

tax

on

the

statement

of

operations.

In

consideration

of

recent

decisions

rendered

by

European

court,

the

Fund

may

file

tax

reclaims

for

taxes

withheld

in

prior

years.

Due

to

the

uncertainty

regarding

collectability

and

timing

of

the

reclaims,

among

other

factors,

a

corresponding

receivable

will

only

be

recognized

when

the

tax

position

meets

the

“more

likely

than

not”

threshold.

Any

tax

reclaims

received

are

included

in

dividends

income

on

the

statement

of

operations.

Recent

Accounting

Pronouncements.

In

March

2020,

the

Financial

Accounting

Standards

Board

("FASB") issued

Accounting

Standards

Update

("ASU")

No.

2020-04

Reference

Rate

Reform

(Topic

848);

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting, 

which

provides

optional

guidance

for

a

limited

period

of

time

to

ease

the

potential

burden

in

accounting

for

(or

recognizing

the

effects

of)

reference

rate

reform.

The

guidance

is

applicable

to

contracts

referencing

London

Interbank

Offered

Rate

(“LIBOR”)

or

another

reference

rate

that

is

expected

to

be

discontinued

due

to

reference

rate

reform.

The

ASU

is

effective

as

of

March

12,

2020

and

generally

can

be

applied

through

December

31,

2022.

Management

expects

the

impact

of

the

ASU

will

not

have

a

material

impact

on

the

Fund’s

financial

statements.

3.

Operating

Policies

Borrowings.

T

he

Fund

participates

in

a

line

of

credit

with

a

bank

which

allows

a

borrowing

commitment

amount

of

up

to

$15

million.

Borrowings

may

be

used

for

investment

purposes,

to

meet

repurchase

requests

and/or

to

facilitate

the

handling

of

unusual

or

unanticipated

short-term

cash

requirements.

The

Fund

will

pledge

securities

as

collateral

for

borrowing

on

the

line

of

credit

and

maintain

an

aggregate

collateral

value

not

less

than

the

outstanding

borrowing

amount

at

all

times.

Interest

is

charged

at

an

annual

rate

equal

to

the

Overnight

Bank

Funding

Rate

(“OBFR”)

plus

0.90%

(effective

March

15,

2022

and

thereafter).

Prior

to

March

15,

2022,

interest

was

charged

at

an

annual

rate

equal

to

LIBOR

plus

0.85%.

Additionally,

a

commitment

fee

is

charged

at

an

annual

rate

of

0.40%

on

any

day

when

the

outstanding

borrowing

amount

is

less

than

90%

of

the

borrowing

commitment

amount.

The

interest

expense

and

commitment

fee

associated

with

these

borrowings

is

included

in

other

expenses

on

the

statement

of

operations.

There

were

no

outstanding

borrowings

as

of

March

31,

2022

.

During

the

year

ended

March

31,

2022

,

the

Fund

borrowed

against

the

line

of

credit

as

follows

(amounts

in

thousands):

Cross

Trades.

The

Fund

may

engage

in

cross

trades.

A

cross

trade

is

a

purchase

or

sale

transaction

between

affiliated

portfolios

executed

directly

or

through

an

intermediary.

Entities

may

be

considered

affiliated

if

they

have

a

common

investment

advisor,

so

a

fund

may

be

considered

affiliated

with

any

portfolio

for

which

the

Fund's

sub-advisor

acts

as

an

investment

advisor.

Such

transactions

are

permissible

provided

that

the

conditions

of

Rule

17a-7

under

the

1940

Act

are

satisfied.

For

the

year

 ended

March

31,

2022

,

the

Fund

did

not

engage

in

cross

trades.

Foreign

Currency

Contracts.

The

Fund

may

be

subject

to

foreign

currency

exchange

rate

risk

in

the

normal

course

of

pursuing

the

Fund's

investment

objectives.

The

Fund

may

use

foreign

currency

contracts

to

gain

exposure

to,

or

hedge

against

changes

in

the

value

of

foreign

currencies. The

Fund enters

into

forward

contracts

to

purchase

and

sell

foreign

currencies

at

a

specified

future

date

at

a

fixed

exchange

rate.

Forward

foreign

currency

contracts

are

valued

at

the

forward

rate,

and

are

marked-to-market

daily.

The

change

in

fair

value

is

recorded

by

the

Fund

as

an

unrealized

gain

or

loss.

When

the

contract

is

closed,

the

Fund

records

a

realized

gain

or

loss

equal

to

the

difference

between

the

value

of

the

contract

at

the

time

it

was

opened

and

the

value

at

the

time

it

was

closed.

Average

Daily

Outstanding

Balance

Weighted

Average

Annual

Interest

Rate

Principal

Diversified

Select

Real

Asset

Fund

$

67

0.98

%

2.

Significant

Accounting

Policies

(continued)

Notes

to

Financial

Statements

Principal

Diversified

Select

Real

Asset

Fund

March

31,

2022

11

The

use

of

forward

foreign

currency

contracts

does

not

eliminate

the

fluctuations

in

underlying

prices

of

the

Fund's

portfolio

securities,

but

it

does

establish

a

rate

of

exchange

that

can

be

achieved

in

the

future.

Although

forward

foreign

currency

contracts

limit

the

risk

of

loss

due

to

a

decline

in

the

value

of

the

hedged

currency,

they

also

limit

any

potential

gain

that

might

result

should

the

value

of

the

currency

increase.

In

addition,

the

Fund

could

be

exposed

to

risks

if

the

counterparties

to

the

contracts

are

unable

to

meet

the

terms

of

their

contracts

or

if

the

value

of

the

currency

changes

unfavorably

to

the

U.S.

dollar

or

other

respective

currency. 

Illiquid

Securities.

Illiquid

securities

generally

cannot

be

sold

or

disposed

of

in

the

ordinary

course

of

business

(within

seven

calendar

days)

at

approximately

the

value

at

which

the

Fund

has

valued

the

investments.

This

may

have

an

adverse

effect

on

the

Fund’s

ability

to

dispose

of

particular

illiquid

securities

at

fair

value

and

may

limit

the

Fund’s

ability

to

obtain

accurate

market

quotations

for

purposes

of

valuing

the

securities. 

Indemnification.

Under

the

Fund’s

by-laws,

present

and

past

officers,

trustees,

and

employees

are

indemnified

against

certain

liabilities

arising

out

of

the

performance

of

their

duties.

In

addition,

in

the

normal

course

of

business,

the

Fund

may

enter

into

a

variety

of

contracts

that

may

contain

representations

and

warranties

which

provide

general

indemnifications.

The

Fund’s

maximum

exposure

under

these

arrangements

is

unknown,

as

this

would

involve

future

claims

that

may

be

made

against

the

Fund.

Private

Investments

in

Public

Equity.

The

Fund

may

invest

in

private

investments

in

public

equity

(“PIPEs”)

which

are

issued

by

a

company

in

the

secondary

market

as

a

means

of

raising

capital.

In

connection

with

PIPEs,

the

Fund

may

enter

into

unfunded

commitments.

Commitments

may

be

subject

to

various

contingencies

and

are

recognized

as

a

financial

instrument

when

the

commitment

is

legally

binding.

These

contingencies

are

considered

in

the

valuation

of

the

commitments.

The

Fund

is

obligated

to

fund

these

commitments

when

the

contingencies

are

met

and

therefore,

the

Fund

must

have

funds

sufficient

to

cover

its

obligation.

Commitments

are

marked

to

market

daily

and

the

unrealized

gain

or

loss

is

shown

as

a

separate

line

item

called

unrealized

gain

or

loss

on

unfunded

commitments

on

the

statement

of

assets

and

liabilities

and

included

in

the

net

change

in

unrealized

appreciation/(depreciation)

of

investments

on

the

statement

of

operations,

as

applicable.

Commitments

are

typically

categorized

as

Level

2

within

the

disclosure

hierarchy.

As

of

March

31,

2022

,

the

Fund

had

no

unfunded

commitments

in

connection

with

PIPEs.

Private

and

Other

Underlying

Funds.

The

Fund

may

invest

in

private

investment

funds

and

other

publicly

traded

investment

funds.

The

shares

of

publicly

traded

investment

funds

and

private

investment

funds

are

collectively

referred

to

as

the

“Underlying

Funds”.

The

Fund

may

indirectly

bear

a

pro

rata

share

of

the

fees

and

expenses

of

the

Underlying

Funds

in

which

it

invests.

Because

the

Underlying

Funds

have

varied

expense

levels

and

the

Fund

may

own

different

proportions

of

Underlying

Funds

at

different

times,

the

amount

of

expense

incurred

indirectly

by

the

Fund

will

vary.

Expenses

included

in

the

statement

of

operations

and

financial

highlights

of

the

Fund

do

not

include

any

expenses

associated

with

the

Underlying

Funds.

Private

investment

funds

are

not

registered

as

investment

companies

under

the

1940

Act

and

therefore

the

Fund

will

not

be

able

to

avail

itself

of

the

protection

of

the

1940

Act

with

respect

to

such

private

investment

funds,

including

certain

corporate

governance

protections,

such

as

the

requirement

of

having

a

majority

or

50%

of

the

directors

serving

on

a

board

as

independent

directors,

statutory

protections

against

self-

dealings

by

the

institutional

asset

managers,

and

leverage

limitations.

The

Fund

will

hold

liquid

assets

while

it

waits

for

such

Underlying

Funds

to

call

capital,

which

may

negatively

impact

its

performance.

Restricted

Securities.

The

Fund

may

invest

in

securities

that

are

subject

to

legal

or

contractual

restrictions

on

resale.

These

securities

generally

may

be

resold

in

transactions

exempt

from

registration

or

to

the

public

if

the

securities

are

registered.

Disposal

of

these

securities

may

involve

time-consuming

negotiations

and

expense,

and

prompt

sale

at

an

acceptable

price

may

be

difficult. 

Senior

Floating

Rate

Interests.

The

Fund

may

invest

in

senior

floating

rate

interests

(bank

loans).

Senior

floating

rate

interests

typically

hold

the

most

senior

position

in

the

capital

structure

of

a

business

entity

(the

“Borrower”),

and

are

secured

by

specific

collateral

and

have

a

claim

on

the

assets

and/or

stock

of

the

Borrower

that

is

senior

to

that

held

by

subordinated

debtholders

and

stockholders

of

the

Borrower.

Senior

floating

rate

interests

are

typically

structured

and

administered

by

a

financial

institution

that

acts

as

the

agent

of

the

lenders

participating

in

the

senior

floating

rate

interest.

Borrowers

of

senior

floating

rate

interests

are

typically

rated

below-investment-grade,

which

means

they

are

more

likely

to

default

than

investment-grade

loans.

A

default

could

lead

to

non-payment

of

income

which

would

result

in

a

reduction

of

income

to

the

Fund

and

there

can

be

no

assurance

that

the

liquidation

of

any

collateral

would

satisfy

the

Borrower’s

obligation

in

the

event

of

non-payment

of

scheduled

interest

or

principal

payments,

or

that

such

collateral

could

be

readily

liquidated.

Senior

floating

rate

interests

pay

interest

at

rates

which

are

periodically

reset

by

reference

to

a

base

lending

rate

plus

a

spread.

These

base

lending

rates

are

generally

the

prime

rate

offered

by

a

designated

U.S.

bank

or

the

LIBOR

rate.

Senior

floating

rate

interests

generally

are

subject

to

mandatory

and/or

optional

prepayment.

Because

of

these

mandatory

prepayment

3.

Operating

Policies

(continued)

Notes

to

Financial

Statements

Principal

Diversified

Select

Real

Asset

Fund

March

31,

2022

12

conditions

and

because

there

may

be

significant

economic

incentives

for

the

Borrower

to

repay,

prepayments

of

senior

floating

rate

interests

may

occur.

As

a

result,

the

actual

remaining

maturity

of

senior

floating

rate

interests

may

be

substantially

less

than

stated

maturities

shown

in

the

schedule

of

investments.

Unfunded

Commitments.

In

connection

with

the

senior

floating

rate

interests,

the

Fund

may

enter

into

unfunded

loan

commitments

(“commitments”).

All

or

a

portion

of

the

commitments

may

be

unfunded.

The

Fund

is

obligated

to

fund

these

commitments

at

the

Borrower’s

discretion.

Therefore,

the

Fund

must

have

funds

sufficient

to

cover

its

contractual

obligation.

Commitments

are

marked

to

market

daily

and

the

unrealized

gain

or

loss

is

shown

as

a

separate

line

item

called

unrealized

gain

or

loss

on

unfunded

commitments

on

the

statement

of

assets

and

liabilities

and

included

in

the

net

change

in

unrealized

appreciation/(depreciation)

of

investments

on

the

statement

of

operations,

as

applicable.

As

of

March

31,

2022,

the

Fund

had

no

commitments

relating

to

senior

floating

rate

interests.

The

Fund

may

also

enter

into

unfunded

commitments

relating

to

potential

future

investments

in

private

investment

funds.

As

of

March

31,

2022,

the

Fund

had

unfunded

commitments

relating

to

potential

future

investments,

as

follows

(amounts

in

thousands):

4.

Fair

Valuation

Fair

value

is

defined

as

the

price

that

the

Fund

would

receive

upon

selling

a

security

in

a

timely

transaction

to

an

independent

buyer

in

the

principal

or

most

advantageous

market

of

the

security

at

the

measurement

date.

In

determining

fair

value,

the

Fund

may

use

one

or

more

of

the

following

approaches:

market,

income,

net

asset

value

and/or

cost.

A

hierarchy

for

inputs

is

used

in

measuring

fair

value

that

maximizes

the

use

of

observable

inputs

and

minimizes

the

use

of

unobservable

inputs

by

requiring

that

the

most

observable

inputs

be

used

when

available.

Observable

inputs

are

inputs

that

reflect

the

assumptions

market

participants

would

use

in

pricing

the

asset

or

liability

developed

based

on

market

data

obtained

from

sources

independent

of

the

Fund.

Unobservable

inputs

are

inputs

that

reflect

the

Fund’s

own

estimates

about

the

estimates

market

participants

would

use

in

pricing

the

asset

or

liability

developed

based

on

the

best

information

available

in

the

circumstances.

The

three-tier

hierarchy

of

inputs

is

summarized

in

the

three

broad

levels

listed

below.

Level

1

–

Quoted

prices

are

available

in

active

markets

for

identical

securities

as

of

the

reporting

date.

Investments

which

are

generally

included

in

this

category

include

listed

equities

and

listed

derivatives.

Level

2

–

Other

significant

observable

inputs

(including

quoted

prices

for

similar

investments,

interest

rates,

prepayment

speeds,

credit

risk,

etc.).

Investments

which

are

generally

included

in

this

category

include

certain

foreign

equities,

corporate

bonds,

senior

floating

rate

interests,

municipal

bonds,

and

U.S.

Government

and

Government

Agency

Obligations.

Level

3

–

Significant

unobservable

inputs

(including

the

Fund’s

assumptions

in

determining

the

fair

value

of

investments).

Investments

which

are

generally

included

in

this

category

include

certain

common

stocks,

corporate

bonds,

or

senior

floating

rate

interests.

In

accordance

with

Accounting

Standards

Codification

820

–

Fair

Value

Measurement

,

the

Fund

has

elected

to

apply

the

practical

expedient

to

value

its

investments

in

private

investment

funds

at

their

respective

net

asset

value

each

calendar

month

or

quarter.

Private

investment

funds

valued

at

net

asset

value

are

excluded

from

the

fair

value

hierarchy.

The

availability

of

observable

inputs

can

vary

from

security

to

security

and

is

affected

by

a

wide

variety

of

factors,

including,

for

example,

the

type

of

security,

whether

the

security

is

new

and

not

yet

established

in

the

market

place,

and

other

characteristics

particular

to

the

transaction.

To

the

extent

that

valuation

is

based

on

models

or

inputs

that

are

less

observable

or

unobservable

in

the

market,

the

determination

of

fair

value

requires

more

judgment.

Accordingly,

the

degree

of

judgment

exercised

by

the

Fund

in

determining

fair

value

is

greatest

for

instruments

categorized

in

Level

3.

Private

Investment

Fund

Unfunded

Commitment

ACIP

Parallel

Fund

A,

LP

$

3,039

Brookfield

Super-Core

Infrastructure

Partners

Fund,

LP

3,000

CBRE

Caledon

Global

Infrastructure

Fund

(International),

LP

2,000

Ceres

Farmland

Holdings,

LP

1,000

GDIF

US

Hedged

Feeder

Fund,

LP

2,000

Hancock

Timberland

and

Farmland

Fund,

LP

99

8

PGIM

Real

Estate

US

Debt

Fund,

LP

3,000

UBS

AgriVest

Farmland

Fund

1,000

3.

Operating

Policies

(continued)

Notes

to

Financial

Statements

Principal

Diversified

Select

Real

Asset

Fund

March

31,

2022

13

In

certain

cases,

the

inputs

used

to

measure

fair

value

may

fall

into

different

levels

of

the

fair

value

hierarchy.

In

such

cases,

for

disclosure

purposes,

the

level

in

the

fair

value

hierarchy

within

which

the

fair

value

measurement

in

its

entirety

falls

is

determined

based

on

the

lowest

level

input

that

is

significant

to

the

fair

value

measurement

in

its

entirety.

Fair

value

is

a

market-based

measure

considered

from

the

perspective

of

a

market

participant

who

holds

the

asset

rather

than

an

entity

specific

measure.

Therefore,

even

when

market

assumptions

are

not

readily

available,

the

Fund’s

own

assumptions

are

set

to

reflect

those

that

market

participants

would

use

in

pricing

the

asset

or

liability

at

the

measurement

date.

The

Fund

uses

prices

and

inputs

that

are

current

as

of

the

measurement

date,

when

available.

Investments

which

are

included

in

the

Level

3

category

may

be

valued

using

quoted

prices

from

brokers

and

dealers

participating

in

the

market

for

these

investments.

These

investments

are

classified

as

Level

3

investments

due

to

the

lack

of

market

transparency

and

market

corroboration

to

support

these

quoted

prices.

Valuation

models

may

be

used

as

the

pricing

source

for

other

investments

classified

as

Level

3.

Valuation

models

rely

on

one

or

more

significant

unobservable

inputs

such

as

prepayment

rates,

probability

of

default,

or

loss

severity

in

the

event

of

default.

Significant

increases

in

any

of

those

inputs

in

isolation

would

result

in

a

significantly

lower

fair

value

measurement.

Benchmark

pricing

procedures

set

the

base

price

of

a

security

based

on

current

market

data.

The

base

price

may

be

a

broker-dealer

quote,

transaction

price,

or

internal

value

based

on

relevant

market

data.

The

fair

values

of

these

securities

are

dependent

on

economic,

political,

and

other

considerations.

The

values

of

such

securities

may

be

affected

by

significant

changes

in

the

economic

conditions,

changes

in

government

policies,

and

other

factors

(e.g.,

natural

disasters,

pandemics,

accidents,

conflicts,

etc.).

The

following

is

a

summary

of

the

inputs

used

as

of

March

31,

2022

in

valuing

the

Fund’s

securities

carried

at

value

(amounts

in

thousands):

*For

additional

detail

regarding

sector

classifications,

please

see

the

schedule

of

investments.

5.

Management

Agreement

and

Transactions

with

Affiliates

Management

Services.

The

Fund

has

agreed

to

pay

management

and

investment

advisory

fees

to

the

Manager

computed

at

an

annual

percentage

rate

of

the

Fund’s

average

daily

net

assets.

A

portion

of

the

management

fee

is

paid

by

the

Manager

to

the

sub-advisors

of

the

Fund,

which

may

be

affiliates

of

the

Manager.

The

annual

rate

paid

by

the

Fund

is

based

upon

the

aggregate

average

daily

net

assets

(“aggregate

net

assets”)

of

the

Fund.

The

management

and

investment

advisory

fees

schedule

for

the

Fund

is

1.70%

of

aggregate

net

assets

up

to

$1.5

billion

and

1.65%

of

aggregate

net

assets

over

$1.5

billion.

The

Manager

has

contractually

agreed

to

waive

0.25%

of

the

Fund’s

management

and

investment

advisory

fees

effective

August

1,

2021.

Prior

to

August

1,

2021,

the

contractual

fee

waiver

was

0.53%.

It

is

expected

that

the

fee

waiver

will

continue

through

the

period

ending

Fund

Level

1

-

Quoted

Prices

Level

2

-

Other

Significant

Observable

Inputs

Level

3

-

Significant

Unobservable

Inputs

Totals

(Level

1,2,3)

Principal

Diversified

Select

Real

Asset

Fund

Bonds*

$

—

$

13,392

$

—

$

13,392

Common

Stocks

Basic

Materials

3,136

3,084

—

6,220

Communications

—

56

—

56

Consumer,

Cyclical

512

62

—

574

Consumer,

Non-cyclical

1,745

1,711

—

3,456

Diversified

128

—

—

128

Energy

19,778

2,074

—

21,852

Financial

10,798

7,297

—

18,095

Industrial

4,576

3,194

—

7,770

Utilities

7,849

6,554

—

14,403

Convertible

Preferred

Stocks

98

—

—

98

Investment

Companies

2,814

—

—

2,814

Total

$

51,434

$

37,424

$

—

$

88,858

Investments

Using

NAV

as

practical

expedient

Private

Investment

Funds

99,

070

Total

investments

in

securities

$

—

$

—

$

—

$

187,

928

4.

Fair

Valuation

(continued)

Notes

to

Financial

Statements

Principal

Diversified

Select

Real

Asset

Fund

March

31,

2022

14

July

31,

2022;

however,

the

Fund

and

the

Manager,

the

parties

to

the

agreement,

may

mutually

agree

to

terminate

the

fee

waiver

prior

to

the

end

of

the

period.

The

Manager

has

contractually

agreed

to

limit

the

Fund’s

expenses

(excluding

interest

expense,

expenses

related

to

fund

investments,

acquired

fund

fees

and

expenses,

and

tax

reclaim

recovery

expenses

and

other

extraordinary

expenses).

The

reductions

and

reimbursements

are

in

amounts

that

maintain

total

operating

expenses

at

or

below

certain

limits.

The

limits

are

expressed

as

a

percentage

of

average

daily

net

assets

attributable

to

each

class

of

shares

on

an

annualized

basis

during

the

reporting

period.

The

expenses

borne

by

the

Manager

are

subject

to

reimbursement

by

the

Fund

through

the

fiscal

year

end,

provided

no

reimbursement

will

be

made

if

it

would

result

in

the

Fund

exceeding

the

total

operating

expense

limits.

Any

amounts

outstanding

at

the

end

of

the

fiscal

year

are

shown

as

an

expense

reimbursement

from

Manager

or

expense

reimbursement

to

Manager

on

the

statement

of

assets

and

liabilities

and

are

settled

monthly.

It

is

expected

that

the

operating

expense

limits

will

continue

through

the

period

ending

July

31,

2022;

however,

the

Fund

and

the

Manager,

the

parties

to

the

agreement,

may

mutually

agree

to

terminate

the

operating

expense

limits

prior

to

the

end

of

the

period.

The

operating

expense

limits

are

as

follows:

*Prior

to

August

1,

2021,

the

contractual

expense

limit

was

1.67%.

**Prior

to

August

1,

2021,

the

contractual

expense

limit

was

1.17%.

^Prior

to

August

1,

2021,

the

contractual

expense

limit

was

1.37%.

Distribution

Fees.

The

Class

A

shares

of

the

Fund

bear

distribution

fees.

The

fees

are

computed

at

an

annual

rate

of

0.25%

of

the

average

daily

net

assets

attributable

to

Class

A

shares

of

the

Fund.

Distribution

fees

are

paid

to

the

Distributor

of

the

Fund.

A

portion

of

the

distribution

fees

may

be

paid

to

other

selling

dealers

for

providing

certain

services.

Chief

Compliance

Officer

Expenses.

The

Fund

pays

certain

expenses

associated

with

the

Chief

Compliance

Officer

(“CCO”).

This

expense

is

allocated

among

the

registered

investment

companies

managed

by

the

Manager

based

on

the

relative

net

assets

of

each

fund

and

is

shown

on

the

statement

of

operations.

For

the

year

ended

March

31,

2022,

the

Fund’s

CCO

expenses

were

less

than

$500.

Sales

Charges.

The

Distributor

retains

sales

charges

on

certain

sales

of

Class

A

shares

based

on

declining

rates

which

begin

at

5.75%.

For

the

year

ended

March

31,

2022,

there

were

no

sales

charges

retained

by

the

Distributor.

Affiliated

Ownership

.

As

of

March

31,

2022,

Principal

Financial

Services

Inc.

and

Principal

Life

Insurance

Company

(each

an

affiliate

of

the

Manager)

owned

shares

of

the

Fund

as

follows

(amounts

of

shares

in

thousands):

6.

Investment

Transactions

For

the

year

ended

March

31,

2022,

the

cost

of

investment

securities

purchased

and

proceeds

from

investment

securities

sold

(not

including

short-term

investments,

return

of

capital,

and

mergers)

by

the

Fund

were

as

follows

(amounts

in

thousands):

7.

Repurchase

Offers

The

Fund

has

a

fundamental

policy

to

make

quarterly

repurchase

offers

for

no

less

than

5%

and

not

more

than

25%

of

its

shares

at

a

price

equal

to

net

asset

value

per

share,

unless

suspended

or

postponed

in

accordance

with

regulatory

requirements,

and

that

each

quarterly

repurchase

pricing

share

occur

on

the

Repurchase

Pricing

Date,

the

date

that

will

be

used

to

determine

the

Fund’s

net

asset

value

per

share

applicable

to

the

repurchase.

The

Fund

will

make

quarterly

repurchase

offers

every

three

months,

in

the

following

months:

March,

June,

September,

and

December.

The

Fund

will

repurchase

shares

that

are

tendered

by

a

specific

date

(the

“Repurchase

Request

Deadline”),

which

will

be

established

by

the

Board

in

accordance

with

Rule

23c-3,

as

amended

from

time

to

time.

Rule

23c-3

requires

the

Repurchase

Request

Deadline

to

be

no

less

than

21

and

no

more

than

42

days

after

the

Fund

sends

notification

to

shareholders

of

the

repurchase

offer.

There

will

be

a

maximum

14

Share

Class

Operating

Expense

Limit

Expiration

Class

A

1.98%*

July

31,

2022

Class

Y

1.48**

%

July

31,

2022

Institutional

1.68^

%

July

31,

2022

Class

A

Class

Y

Institutional

Principal

Diversified

Select

Real

Asset

Fund

11

6,607

11

Purchases

Sales

Principal

Diversified

Select

Real

Asset

Fund

$

81,381

$

77,572

5.

Management

Agreement

and

Transactions

with

Affiliates

(continued)

Notes

to

Financial

Statements

Principal

Diversified

Select

Real

Asset

Fund

March

31,

2022

15

calendar

day

period,

or

the

next

business

day

if

the

14th

calendar

day

is

not

a

business

day,

between

the

Repurchase

Request

Deadline

and

the

Repurchase

Pricing

Date.

If

a

repurchase

offer

by

the

Fund

is

oversubscribed,

the

Fund

may

repurchase,

but

is

not

required

to

repurchase,

additional

shares

up

to

a

maximum

amount

of

2%

of

the

outstanding

shares

of

the

Fund.

If

the

Fund

determines

not

to

repurchase

additional

shares

beyond

the

repurchase

offer

amount,

or

if

shareholders

tender

an

amount

of

shares

greater

than

that

which

the

Fund

is

entitled

to

repurchase,

the

Fund

will

repurchase

the

shares

tendered

on

a

pro

rata

basis.

For

the

year

ended

March

31,

2022,

shares

of

the

Fund

were

repurchased

during

the

repurchase

offer

windows

as

follows

(amounts

in

thousands):

8.

Federal

Tax

Information

Distributions

to

Shareholders.

The

federal

income

tax

character

of

distributions

paid

for

the

year

ended

March

31,

2022

and

year

ended

March

31,

2021

,

were

as

follows

(amounts

in

thousands):

*The

Fund

designates

these

distributions

as

long-term

capital

gain

dividends

per

IRC

Sec.

852

(b)(3)(c)

in

the

20-percent

group

(which

may

be

taxed

at

a

20-percent

rate,

a

15-percent

rate,

or

a

0-percent

rate,

depending

on

the

shareholder’s

taxable

income).

For

U.S.

federal

income

tax

purposes,

short-term

capital

gain

distributions

are

considered

ordinary

income

distributions.

Distributable

Earnings.

As

of

March

31,

2022,

the

components

of

distributable

earnings

(accumulated

loss)

on

a

federal

tax

basis

were

as

follows

(amounts

in

thousands):

Capital

Loss

Carryforwards.

For

federal

income

tax

purposes,

capital

loss

carryforwards

are

losses

that

can

be

used

to

offset

future

capital

gains

of

the

Fund.

As

of

March

31,

2022

,

the

Fund

had

no

capital

loss

carryforwards.

For

the

year

ended

March

31,

2022

,

the

Fund

did

not

utilize

capital

loss

carryforwards.

Late-Year

Losses.

A

regulated

investment

company

may

elect

to

treat

any

portion

of

its

qualified

late-year

loss

as

arising

on

the

first

day

of

the

next

taxable

year.

Qualified

late-year

losses

are

certain

capital

and

ordinary

losses

which

occur

during

the

portion

of

the

Fund’s

taxable

year

subsequent

to

October

31

and

December

31,

respectively.

As

of

March

31,

2022

,

the

Fund

does

not

plan

to

defer

any

late-year

losses.

Reclassification

of

Capital

Accounts.

The

Fund

may

record

reclassifications

in

its

capital

accounts.

These

reclassifications

have

no

impact

on

the

total

net

assets

of

the

Fund.

The

reclassifications

are

a

result

of

permanent

differences

between

U.S.

GAAP

and

tax

accounting.

Adjustments

are

made

to

reflect

the

impact

these

items

have

on

current

and

future

distributions

to

shareholders.

Therefore,

the

source

of

the

Fund’s

distributions

may

be

shown

in

the

accompanying

statement

of

changes

in

net

assets

as

from

net

investment

income

and

net

realized

gain

on

investments

or

from

tax

return

of

capital

depending

on

the

type

of

book

and

tax

differences

that

exist.

For

the

year

ended

March

31,

2022,

the

Fund

recorded

reclassifications

as

follows

(amounts

in

thousands):

Repurchase

Offer

#1

Repurchase

Offer

#2

Repurchase

Offer

#3

Repurchase

Offer

#4

Commencement

Date

March

29,

2021

June

28,

2021

September

27,

2021

December

27,

2021

Repurchase

Request

Deadline

April

28,

2021

July

28,

2021

October

27,

2021

January

26,

2022

Repurchase

Pricing

Date

April

28,

2021

July

28,

2021

October

27,

2021

January

26,

2022

Amount

Repurchased

$

—

$

—

$

—

$

5

Shares

Repurchased

—

—

—

—

Ordinary

Income

Long

Term

Capital

Gain*

2022

2021

2022

2021

Principal

Diversified

Select

Real

Asset

Fund

$

6,371

$

4,772

$

5,798

$

—

Undistributed

Ordinary

Income

Undistributed

Long-Term

Capital

Gains

Net

Unrealized

Appreciation

(Depreciation)

Other

Temporary

Differences

*

Total

Accumulated

Earnings

(Deficit)

Principal

Diversified

Select

Real

Asset

Fund

$

505

$

4,551

$

20,735

$

(53

)

$

25,738

Total

Distributable

Earnings

(Accumulated

Loss)

Capital

Shares

and

Additional

Paid-in-Capital

Principal

Diversified

Select

Real

Asset

Fund

$

2

$

(2)

7.

Repurchase

Offers

(continued)

Notes

to

Financial

Statements

Principal

Diversified

Select

Real

Asset

Fund

March

31,

2022

16

Federal

Income

Tax

Basis.

As

of

March

31,

2022

,

the

net

federal

income

tax

unrealized

appreciation

(depreciation)

and

federal

tax

cost

of

investments

held

by

the

Fund

were

as

follows

(amounts

in

thousands):

9.

Subsequent

Events

Management

has

evaluated

events

and

transactions

that

have

occurred

through

the

date

the

financial

statements

were

issued

that

would

merit

recognition

or

disclosure

in

the

financial

statements.

The

Fund

completed

a

quarterly

repurchase

offer

on

April

27,

2022

which

resulted

in

332,138

shares

being

repurchased

for

$9,220,140.

There

were

no

additional

items

requiring

adjustment

of

the

financial

statements

or

additional

disclosure.

Unrealized

Appreciation

Unrealized

(Depreciation)

Net

Unrealized

Appreciation/

(Depreciation)

Cost

for

Federal

Income

Tax

Purposes

Principal

Diversified

Select

Real

Asset

Fund

$

25,

209

$

(4,

473

)

$

20,

736

$

167,19

2

8.

Federal

Tax

Information

(continued)

Schedule

of

Investments

Principal

Diversified

Select

Real

Asset

Fund

March

31,

2022

See

accompanying

notes.

17

INVESTMENT

COMPANIES

-

1

.50

%

Shares

Held

Value

(000's)

Exchange-Traded

Funds

-

0

.13

%

SPDR

S&P

Global

Natural

Resources

ETF

3,873‌

$

243‌

Money

Market

Funds

-

1

.37

%

Morgan

Stanley

Institutional

Liquidity

Funds

-

Government

Portfolio

-

Institutional

Class

0.23%

(a)

2,570,954‌

2,571‌

TOTAL

INVESTMENT

COMPANIES

$

2,814‌

PRIVATE

INVESTMENT

FUNDS

-

52

.68

%

Shares

Held

Value

(000's)

Agriculture

-

18

.85

%

Ceres

Farmland

Holdings,

LP

(b)

N/A

$

8,653‌

Hancock

Timberland

and

Farmland

Fund,

LP

(b)

N/A

12,622‌

UBS

AgriVest

Farmland

Fund

(b)

N/A

14,171‌

$

35,446‌

Diversified

Financial

Services

-

2

.23

%

Sound

Point

CLO

Fund,

LP

(b),(c)

N/A

4,202‌

Energy

-

Alternate

Sources

-

7

.34

%

ACIP

Parallel

Fund

A,

LP

(b)

N/A

1,932‌

Brookfield

Super-Core

Infrastructure

Partners

Fund,

LP

(b)

N/A

5,129‌

CBRE

Caledon

Global

Infrastructure

Fund

(International),

LP

(b)

N/A

6,735‌

$

13,796‌

Private

Equity

-

3

.39

%

GDIF

US

Hedged

Feeder

Fund,

LP

(b)

N/A

6,381‌

Real

Estate

-

10

.72

%

Brookfield

Senior

Mezzanine

Real

Estate

Finance

Fund,

LP

(b),(c)

N/A

5,000‌

PGIM

Real

Estate

US

Debt

Fund,

LP

(b)

N/A

5,194‌

UBS

Trumbull

Property

Growth

&

Income

Fund

(b)

N/A

9,971‌

$

20,165‌

REITs

-

10

.15

%

BTG

Pactual

Open

Ended

Core

US

Timberland

Fund,

LP

(b)

N/A

19,080‌

TOTAL

PRIVATE

INVESTMENT

FUNDS

$

99,070‌

COMMON

STOCKS

-

38

.58

%

Shares

Held

Value

(000's)

Agriculture

-

0

.25

%

Archer-Daniels-Midland

Co

1,820‌

$

164‌

Bunge

Ltd

1,366‌

152‌

Darling

Ingredients

Inc

(c)

1,965‌

158‌

$

474‌

Biotechnology

-

0

.08

%

Corteva

Inc

2,741‌

158‌

Building

Materials

-

0

.19

%

Fortune

Brands

Home

&

Security

Inc

1,598‌

119‌

Geberit

AG

244‌

150‌

Masco

Corp

1,585‌

81‌

$

350‌

Chemicals

-

0

.74

%

CF

Industries

Holdings

Inc

1,760‌

181‌

Diversey

Holdings

Ltd

(c)

4,457‌

34‌

Ecolab

Inc

1,042‌

184‌

FMC

Corp

1,216‌

160‌

ICL

Group

Ltd

12,572‌

149‌

Mosaic

Co/The

2,724‌

181‌

Nutrien

Ltd

1,662‌

172‌

Sociedad

Quimica

y

Minera

de

Chile

SA

ADR

2,151‌

184‌

Yara

International

ASA

2,794‌

140‌

$

1,385‌

Commercial

Services

-

1

.00

%

Atlas

Arteria

Ltd

178,684‌

870‌

CCR

SA

113,100‌

326‌

Transurban

Group

68,139‌

688‌

$

1,884‌

Consumer

Products

-

0

.07

%

Avery

Dennison

Corp

809‌

141‌

Distribution

&

Wholesale

-

0

.08

%

Core

&

Main

Inc

(c)

6,498‌

157‌

COMMON

STOCKS

(continued)

Shares

Held

Value

(000’s)

Diversified

Financial

Services

-

0

.04

%

RAM

Essential

Services

Property

Fund

106,090‌

$

74‌

Electric

-

5

.37

%

Brookfield

Renewable

Corp

14,654‌

642‌

Clearway

Energy

Inc

-

Class

C

23,642‌

863‌

Constellation

Energy

Corp

8,923‌

502‌

CPFL

Energia

SA

87,500‌

593‌

EDP

-

Energias

de

Portugal

SA

113,050‌

556‌

Emera

Inc

8,594‌

426‌

Entergy

Corp

5,609‌

655‌

FirstEnergy

Corp

15,376‌

705‌

Iberdrola

SA

85,195‌

931‌

National

Grid

PLC

69,605‌

1,070‌

NextEra

Energy

Inc

2,130‌

180‌

Public

Service

Enterprise

Group

Inc

13,848‌

969‌

Red

Electrica

Corp

SA

20,874‌

429‌

Southern

Co/The

7,829‌

568‌

SSE

PLC

43,886‌

1,003‌

$

10,092‌

Electronics

-

0

.07

%

Badger

Meter

Inc

1,251‌

125‌

Energy

-

Alternate

Sources

-

0

.81

%

NextEra

Energy

Partners

LP

9,296‌

775‌

Sunnova

Energy

International

Inc

(c)

32,143‌

741‌

$

1,516‌

Engineering

&

Construction

-

1

.33

%

AECOM

3,724‌

286‌

Aena

SME

SA

(c),(d)

2,852‌

475‌

Ferrovial

SA

14,001‌

372‌

Grupo

Aeroportuario

del

Pacifico

SAB

de

CV

34,100‌

550‌

Grupo

Aeroportuario

del

Sureste

SAB

de

CV

12,185‌

271‌

Stantec

Inc

3,317‌

166‌

Vinci

SA

3,726‌

381‌

$

2,501‌

Environmental

Control

-

0

.81

%

China

Water

Affairs

Group

Ltd

210,000‌

229‌

Evoqua

Water

Technologies

Corp

(c)

4,083‌

192‌

Kurita

Water

Industries

Ltd

6,500‌

240‌

METAWATER

Co

Ltd

7,400‌

121‌

Montrose

Environmental

Group

Inc

(c)

963‌

51‌

Pentair

PLC

6,775‌

367‌

Tetra

Tech

Inc

1,910‌

315‌

$

1,515‌

Food

-

0

.16

%

Ingredion

Inc

1,601‌

140‌

Wilmar

International

Ltd

44,200‌

153‌

$

293‌

Forest

Products

&

Paper

-

0

.68

%

International

Paper

Co

3,265‌

151‌

Mondi

PLC

6,738‌

131‌

Nine

Dragons

Paper

Holdings

Ltd

149,000‌

129‌

Smurfit

Kappa

Group

PLC

2,839‌

126‌

Stora

Enso

Oyj

7,395‌

145‌

Suzano

SA

ADR

13,326‌

155‌

Svenska

Cellulosa

AB

SCA

8,637‌

168‌

Sylvamo

Corp

(c)

4,087‌

136‌

UPM-Kymmene

Oyj

4,083‌

133‌

$

1,274‌

Gas

-

0

.73

%

Enagas

SA

21,981‌

488‌

Snam

SpA

153,586‌

886‌

$

1,374‌

Healthcare

-

Products

-

0

.27

%

Danaher

Corp

1,725‌

506‌

Holding

Companies

-

Diversified

-

0

.07

%

Sustainable

Development

Acquisition

I

Corp

(c)

12,792‌

125‌

Sustainable

Development

Acquisition

I

Corp

-

Warrants

(c)

8,311‌

3‌

$

128‌

Schedule

of

Investments

Principal

Diversified

Select

Real

Asset

Fund

March

31,

2022

See

accompanying

notes.

18

COMMON

STOCKS

(continued)

Shares

Held

Value

(000’s)

Home

Builders

-

0

.10

%

DR

Horton

Inc

1,784‌

$

133‌

Persimmon

PLC

2,222‌

62‌

$

195‌

Housewares

-

0

.07

%

Scotts

Miracle-Gro

Co/The

1,017‌

125‌

Iron

&

Steel

-

0

.48

%

ArcelorMittal

SA

4,583‌

147‌

Fortescue

Metals

Group

Ltd

10,819‌

166‌

Nippon

Steel

Corp

7,800‌

138‌

Novolipetsk

Steel

PJSC

3,680‌

—‌

Nucor

Corp

1,086‌

161‌

POSCO

Holdings

Inc

600‌

144‌

Severstal

PAO

4,878‌

—‌

Vale

SA

ADR

7,722‌

154‌

$

910‌

Lodging

-

0

.05

%

Travel

+

Leisure

Co

1,673‌

97‌

Machinery

-

Diversified

-

0

.74

%

Georg

Fischer

AG

243‌

290‌

IDEX

Corp

1,051‌

202‌

Lindsay

Corp

1,078‌

169‌

Mueller

Water

Products

Inc

-

Class

A

9,937‌

128‌

Xylem

Inc/NY

3,398‌

290‌

Zurn

Water

Solutions

Corp

8,944‌

317‌

$

1,396‌

Metal

Fabrication

&

Hardware

-

0

.19

%

Advanced

Drainage

Systems

Inc

3,087‌

367‌

Mining

-

1

.41

%

Agnico

Eagle

Mines

Ltd

2,818‌

172‌

Anglo

American

PLC

2,784‌

145‌

Antofagasta

PLC

6,985‌

152‌

Barrick

Gold

Corp

6,324‌

155‌

BHP

Group

Ltd

4,217‌

162‌

First

Quantum

Minerals

Ltd

4,872‌

169‌

Franco-Nevada

Corp

967‌

154‌

Freeport-McMoRan

Inc

3,042‌

151‌

Glencore

PLC

(c)

24,065‌

157‌

Newcrest

Mining

Ltd

7,653‌

155‌

Newmont

Corp

2,157‌

171‌

Norsk

Hydro

ASA

15,024‌

146‌

Polyus

PJSC

815‌

—‌

Rio

Tinto

Ltd

1,666‌

149‌

South32

Ltd

40,902‌

155‌

Southern

Copper

Corp

2,057‌

156‌

Sumitomo

Metal

Mining

Co

Ltd

2,900‌

147‌

Wheaton

Precious

Metals

Corp

3,251‌

155‌

$

2,651‌

Oil

&

Gas

-

1

.89

%

BP

PLC

29,235‌

143‌

Canadian

Natural

Resources

Ltd

2,558‌

158‌

Chevron

Corp

992‌

162‌

ConocoPhillips

1,506‌

151‌

Ecopetrol

SA

ADR

8,829‌

164‌

Eni

SpA

9,187‌

134‌

EOG

Resources

Inc

1,243‌

148‌

Equinor

ASA

4,509‌

168‌

Exxon

Mobil

Corp

1,822‌

151‌

Hess

Corp

1,414‌

151‌

LUKOIL

PJSC

ADR

820‌

—‌

Marathon

Petroleum

Corp

1,835‌

157‌

Neste

Oyj

3,602‌

164‌

Novatek

PJSC

482‌

—‌

Occidental

Petroleum

Corp

3,266‌

185‌

Petroleo

Brasileiro

SA

ADR

9,991‌

148‌

Phillips

66

1,696‌

147‌

Pioneer

Natural

Resources

Co

597‌

149‌

Reliance

Industries

Ltd

(d)

2,263‌

155‌

Repsol

SA

10,930‌

143‌

COMMON

STOCKS

(continued)

Shares

Held

Value

(000’s)

Oil

&

Gas

(continued)

Rosneft

Oil

Co

PJSC

13,576‌

$

—‌

Shell

PLC

5,397‌

148‌

Suncor

Energy

Inc

4,672‌

152‌

Tatneft

PJSC

ADR

2,773‌

—‌

TotalEnergies

SE

2,783‌

141‌

Valero

Energy

Corp

1,711‌

174‌

Woodside

Petroleum

Ltd

6,894‌

166‌

$

3,559‌

Oil

&

Gas

Services

-

0

.27

%

Aris

Water

Solution

Inc

11,198‌

204‌

Halliburton

Co

4,258‌

161‌

Schlumberger

NV

3,639‌

150‌

$

515‌

Packaging

&

Containers

-

0

.46

%

Amcor

PLC

12,239‌

139‌

DS

Smith

PLC

30,758‌

129‌

Packaging

Corp

of

America

968‌

151‌

Sealed

Air

Corp

2,121‌

142‌

SIG

Combibloc

Group

AG

(c)

6,320‌

159‌

Westrock

Co

3,144‌

148‌

$

868‌

Pipelines

-

8

.65

%

APA

Group

89,628‌

712‌

Cheniere

Energy

Inc

15,122‌

2,097‌

DCP

Midstream

LP

32,912‌

1,105‌

Enbridge

Inc

14,013‌

645‌

Energy

Transfer

LP

46,071‌

516‌

Enterprise

Products

Partners

LP

18,452‌

476‌

Gibson

Energy

Inc

24,732‌

495‌

Hess

Midstream

LP

25,784‌

773‌

MPLX

LP

34,348‌

1,140‌

ONEOK

Inc

15,557‌

1,099‌

Pembina

Pipeline

Corp

23,264‌

874‌

Plains

All

American

Pipeline

LP

66,553‌

716‌

Targa

Resources

Corp

33,888‌

2,558‌

TC

Energy

Corp

3,889‌

219‌

Western

Midstream

Partners

LP

44,823‌

1,130‌

Williams

Cos

Inc/The

51,103‌

1,707‌

$

16,262‌

Private

Equity

-

0

.16

%

Capitaland

Investment

Ltd/Singapore

(c)

59,700‌

175‌

Centuria

Capital

Group

55,092‌

117‌

$

292‌

Real

Estate

-

1

.39

%

Castellum

AB

4,690‌

116‌

ESR

Kendall

Square

REIT

Co

Ltd

18,759‌

108‌

Fabege

AB

5,752‌

85‌

Hongkong

Land

Holdings

Ltd

38,300‌

187‌

Midea

Real

Estate

Holding

Ltd

(d)

26,000‌

52‌

Mitsubishi

Estate

Co

Ltd

15,000‌

223‌

Mitsui

Fudosan

Co

Ltd

17,400‌

372‌

New

World

Development

Co

Ltd

52,750‌

214‌

Qualitas

Ltd

(c)

73,460‌

125‌

Samhallsbyggnadsbolaget

i

Norden

AB

32,900‌

147‌

Sun

Hung

Kai

Properties

Ltd

18,000‌

214‌

Vonovia

SE

13,504‌

630‌

Wihlborgs

Fastigheter

AB

5,302‌

111‌

Zhongliang

Holdings

Group

Co

Ltd

98,500‌

27‌

$

2,611‌

REITs

-

8

.04

%

Activia

Properties

Inc

31‌

108‌

Agree

Realty

Corp

1,430‌

95‌

AIMS

APAC

REIT

48,200‌

49‌

Alexandria

Real

Estate

Equities

Inc

378‌

76‌

Allied

Properties

Real

Estate

Investment

Trust

4,300‌

160‌

American

Homes

4

Rent

7,789‌

312‌

American

Tower

Corp

388‌

97‌

Apartment

Income

REIT

Corp

1,881‌

101‌

Schedule

of

Investments

Principal

Diversified

Select

Real

Asset

Fund

March

31,

2022

See

accompanying

notes.

19

COMMON

STOCKS

(continued)

Shares

Held

Value

(000’s)

REITs

(continued)

Arena

REIT

18,291‌

$

67‌

AvalonBay

Communities

Inc

414‌

103‌

Big

Yellow

Group

PLC

17,793‌

359‌

Broadstone

Net

Lease

Inc

4,833‌

105‌

CapitaLand

Integrated

Commercial

Trust

79,033‌

131‌

Centuria

Industrial

REIT

41,395‌

118‌

Centuria

Office

REIT

24,576‌

40‌

CFE

Capital

S

de

RL

de

CV

131,400‌

172‌

Charter

Hall

Group

3,042‌

37‌

CRE

Logistics

REIT

Inc

55‌

93‌

Crown

Castle

International

Corp

3,575‌

660‌

CubeSmart

7,300‌

380‌

Daiwa

House

REIT

Investment

Corp

92‌

248‌

Daiwa

Office

Investment

Corp

15‌

93‌

Dexus

25,510‌

208‌

Digital

Core

REIT

Management

Pte

Ltd

(c)

177,218‌

196‌

Dream

Industrial

Real

Estate

Investment

Trust

27,000‌

349‌

Equinix

Inc

286‌

212‌

ESR-REIT

251,188‌

80‌

Essex

Property

Trust

Inc

196‌

68‌

First

Industrial

Realty

Trust

Inc

3,200‌

198‌

Gecina

SA

1,007‌

127‌

Goodman

Group

6,745‌

115‌

Healthcare

Trust

of

America

Inc

5,486‌

172‌

HealthCo

REIT

11,326‌

16‌

Independence

Realty

Trust

Inc

17,619‌

466‌

Industrial

&

Infrastructure

Fund

Investment

Corp

60‌

91‌

Industrial

Logistics

Properties

Trust

11,461‌

260‌

Ingenia

Communities

Group

19,978‌

75‌

Inmobiliaria

Colonial

Socimi

SA

13,226‌

121‌

InvenTrust

Properties

Corp

6,200‌

191‌

Invitation

Homes

Inc

14,223‌

571‌

Irongate

Group

72,388‌

103‌

Japan

Metropolitan

Fund

Invest

27‌

23‌

Klepierre

SA

3,716‌

99‌

Lendlease

Global

Commercial

-

Rights

(c)

24,824‌

1‌

Lendlease

Global

Commercial

REIT

85,600‌

49‌

Life

Science

Reit

PLC

(c)

102,469‌

135‌

Medical

Properties

Trust

Inc

12,837‌

271‌

Merlin

Properties

Socimi

SA

18,214‌

213‌

MGM

Growth

Properties

LLC

9,443‌

365‌

Minto

Apartment

Real

Estate

Investment

Trust

(d)

2,300‌

39‌

Mitsubishi

Estate

Logistics

REIT

Investment

Corp

(c)

25‌

97‌

National

Storage

Affiliates

Trust

4,400‌

276‌

Nexus

Industrial

REIT

24,200‌

247‌

NSI

NV

6,236‌

274‌

Park

Hotels

&

Resorts

Inc

10,634‌

208‌

Plymouth

Industrial

REIT

Inc

6,414‌

174‌

Prologis

Inc

4,929‌

796‌

Rexford

Industrial

Realty

Inc

3,141‌

234‌

Sabra

Health

Care

REIT

Inc

19,632‌

292‌

Saul

Centers

Inc

3,248‌

171‌

Segro

PLC

27,968‌

492‌

Sekisui

House

Reit

Inc

351‌

232‌

SF

Real

Estate

Investment

Trust

302,000‌

125‌

STORE

Capital

Corp

4,945‌

145‌

Summit

Industrial

Income

REIT

19,830‌

349‌

Sun

Communities

Inc

3,489‌

612‌

Sunstone

Hotel

Investors

Inc

(c)

13,550‌

160‌

UNITE

Group

PLC/The

6,901‌

105‌

Ventas

Inc

11,524‌

712‌

VICI

Properties

Inc

18,190‌

518‌

Welltower

Inc

2,434‌

234‌

Weyerhaeuser

Co

6,498‌

247‌

$

15,118‌

Telecommunications

-

0

.03

%

Eutelsat

Communications

SA

5,123‌

56‌

COMMON

STOCKS

(continued)

Shares

Held

Value

(000’s)

Transportation

-

0

.34

%

Getlink

SE

36,008‌

$

648‌

Water

-

1

.56

%

American

Water

Works

Co

Inc

4,687‌

776‌

Essential

Utilities

Inc

11,684‌

598‌

Grupo

Rotoplas

SAB

de

CV

(c)

74,880‌

95‌

Middlesex

Water

Co

814‌

86‌

Pennon

Group

PLC

9,165‌

129‌

SJW

Group

1,845‌

128‌

United

Utilities

Group

PLC

28,311‌

417‌

Veolia

Environnement

SA

20,127‌

645‌

York

Water

Co/The

1,403‌

63‌

$

2,937‌

TOTAL

COMMON

STOCKS

$

72,554‌

CONVERTIBLE

PREFERRED

STOCKS

-

0

.05

%

Shares

Held

Value

(000's)

REITs

-

0

.05

%

RPT

Realty

7.25%

(e)

1,650‌

$

98‌

TOTAL

CONVERTIBLE

PREFERRED

STOCKS

$

98‌

BONDS

-

7

.12

%

Principal

Amount

(000's)

Value

(000's)

Commercial

Mortgage

Backed

Securities

-

7

.12

%

BANK

2018-BNK13

3.00%,

08/15/2061

(d)

$

2,000‌

$

1,565‌

BANK

2019-BNK22

1.50%,

11/15/2062

(d),(f),(g)

2,000‌

171‌

1.96%,

11/15/2062

(d),(g)

1,000‌

634‌

Benchmark

2018-B3

Mortgage

Trust

3.04%,

04/10/2051

(d),(g)

500‌

425‌

Benchmark

2018-B6

Mortgage

Trust

3.11%,

10/10/2051

(d),(g)

1,000‌

837‌

Benchmark

2019-B11

Mortgage

Trust

3.00%,

05/15/2052

(d)

310‌

256‌

Benchmark

2019-B13

Mortgage

Trust

1.00%,

08/15/2057

(d),(f),(g)

1,750‌

102‌

3.00%,

08/15/2057

(d)

1,750‌

1,091‌

Benchmark

2020-B20

Mortgage

Trust

1.55%,

10/15/2053

(d),(f),(g)

3,250‌

346‌

Benchmark

2020-B21

Mortgage

Trust

1.46%,

12/17/2053

(f),(g)

8,982‌

847‌

Benchmark

2021-B28

Mortgage

Trust

1.38%,

08/15/2054

(d),(f),(g)

4,000‌

424‌

Benchmark

2021-B29

Mortgage

Trust

2.00%,

09/15/2054

(d)

1,000‌

755‌

CAMB

Commercial

Mortgage

Trust

2019-LIFE

1.47%,

12/15/2037

(d)

220‌

219‌

1.00

x

1

Month

USD

LIBOR

+

1.07%

Citigroup

Commercial

Mortgage

Trust

2018-C6

5.07%,

11/10/2051

(g)

1,000‌

1,021‌

Citigroup

Commercial

Mortgage

Trust

2019-GC41

3.00%,

08/10/2056

(d)

1,400‌

858‌

Freddie

Mac

Multifamily

Structured

Pass

Through

Certificates

1.51%,

01/25/2027

(f),(g)

11,976‌

722‌

2.45%,

03/25/2049

(f),(g)

6,890‌

812‌

GS

Mortgage

Securities

Trust

2013-GCJ14

4.73%,

08/10/2046

(d),(g)

539‌

515‌

GS

Mortgage

Securities

Trust

2019-GC40

1.16%,

07/10/2052

(d),(f),(g)

9,860‌

763‌

GS

Mortgage

Securities

Trust

2019-GC42

0.94%,

09/01/2052

(d),(f),(g)

3,246‌

202‌

Schedule

of

Investments

Principal

Diversified

Select

Real

Asset

Fund

March

31,

2022

See

accompanying

notes.

20

BONDS

(continued)

Principal

Amount

(000’s)

Value

(000’s)

Commercial

Mortgage

Backed

Securities

(continued)

Morgan

Stanley

Bank

of

America

Merrill

Lynch

Trust

2015-C25

4.53%,

10/15/2048

(d),(g)

$

1,000‌

$

827‌

$

13,392‌

TOTAL

BONDS

$

13,392‌

Total

Investments

$

187,928‌

Other

Assets

and

Liabilities

-  0.07%

134‌

TOTAL

NET

ASSETS

-

100.00%

$

188,062‌

(a)

Current

yield

shown

is

as

of

period

end.

(b)

Private

Investment

Funds

have

quarterly

or

annual

redemption

frequencies

and

are

considered

restricted

securities.

Please

see

Private

Investment

Funds

sub-schedule

for

additional

information.

(c)

Non-income

producing

security

(d)

Security

exempt

from

registration

under

Rule

144A

of

the

Securities

Act

of

1933.

These

securities

may

be

resold

in

transactions

exempt

from

registration,

normally

to

qualified

institutional

buyers.

At

the

end

of

the

period,

the

value

of

these

securities

totaled

$10,711

or

5.70%

of

net

assets.

(e)

Perpetual

security.

Perpetual

securities

pay

an

indefinite

stream

of

interest,

but

they

may

be

called

by

the

issuer

at

an

earlier

date.

Date

shown,

if

any,

reflects

the

next

call

date

or

final

legal

maturity

date.

Rate

shown

is

as

of

period

end.

(f)

Security

is

an

Interest

Only

Strip.

(g)

Certain

variable

rate

securities

are

not

based

on

a

published

reference

rate

and

spread

but

are

determined

by

the

issuer

or

agent

and

are

based

on

current

market

conditions.  These

securities

do

not

indicate

a

reference

rate

and

spread

in

their

description.

Rate

shown

is

the

rate

in

effect

as

of

period

end.

Portfolio

Summary  (unaudited)

Sector

Percent

Financial

36

.17‌

%

Consumer,

Non-cyclical

20

.68‌

%

Energy

18

.96‌

%

Utilities

7

.66‌

%

Mortgage

Securities

7

.12‌

%

Industrial

4

.13‌

%

Basic

Materials

3

.31‌

%

Money

Market

Funds

1

.37‌

%

Consumer,

Cyclical

0

.30‌

%

Investment

Companies

0

.13‌

%

Diversified

0

.07‌

%

Communications

0

.03‌

%

Other

Assets

and

Liabilities

0

.07‌

%

TOTAL

NET

ASSETS

100.00%

Private

Investment

Funds

Security

Name

Acquisition

Date

Cost

Value

Redemption

Notice

(days)

Percent

of

Net

Assets

ACIP

Parallel

Fund

A,

LP

(a)

11/15/2021

-

03/08/2022

$

1,961‌

$

1,932‌

N/A

1.03%

Brookfield

Senior

Mezzanine

Real

Estate

Finance

Fund,

LP

(b)

03/31/2022

5,000‌

5,000‌

90

2.66%

Brookfield

Super-Core

Infrastructure

Partners

Fund,

LP

(c)

07/01/2021

5,000‌

5,129‌

N/A

2.73%

BTG

Pactual

Open

Ended

Core

US

Timberland

Fund,

LP

(d)

07/01/2019

-

12/30/2021

17,142‌

19,080‌

90

10.15%

CBRE

Caledon

Global

Infrastructure

Fund

(International),

LP

(e)

07/16/2021

6,121‌

6,735‌

N/A

3.58%

Ceres

Farmland

Holdings,

LP

(f)

11/06/2019,

02/05/2021

7,000‌

8,653‌

N/A

4.60%

GDIF

US

Hedged

Feeder

Fund,

LP

(g)

04/23/2021

-

10/13/2021

6,290‌

6,381‌

N/A

3.39%

Hancock

Timberland

and

Farmland

Fund,

LP

(h)

08/12/2020

-

12/17/2021

12,003‌

12,622‌

N/A

6.71%

PGIM

Real

Estate

US

Debt

Fund,

LP

(i)

04/30/2021,

06/30/2021

5,178‌

5,194‌

N/A

2.76%

Sound

Point

CLO

Fund,

LP

(j)

08/06/2019

4,000‌

4,202‌

60

2.23%

UBS

AgriVest

Farmland

Fund

(k)

07/01/2020

-

06/30/2021

13,054‌

14,171‌

60

7.54%

UBS

Trumbull

Property

Growth

&

Income

Fund

(l)

07/01/2020

-

12/30/2021

7,632‌

9,971‌

60

5.30%

Total

$

99,070‌

52.68%

The

private

investment

funds

listed

in

the

table

do

not

include

any

unfunded

commitments.

Amounts

in

thousands.

(a)

This

closed-end

fund

focuses

on

the

Climate

Infrastructure

sector

which

includes

value-add

renewable

energy,

resource

and

energy

efficiency,

transmission

and

smart

grids,

vehicle

electrification,

and

energy

storage

and

microgrids.

The

fund

has

a

life

term

of

10

years

during

which,

redemptions

are

not

permitted.

(b)

The

fund

was

established

as

an

open-end

senior

real

estate

debt

fund

focused

on

providing

primarily

floating

rate

financing

secured

by

commercial

property

primarily

located

in

the

U.S.

Redemptions

are

subject

to

a

two-year

holding

period

from

the

acquisition

date.

(c)

This

open-end

fund

will

invest

in

high-quality,

core

infrastructure

assets

principally

throughout

North

America,

Europe

and

Australia

with

a

focus

on

current

yield,

diversification

and

inflation

protection.

Specifically,

the

fund

will

focus

on

regulated

or

contracted

assets

in

the

utilities,

energy,

power

and

transportation

sector

where

Brookfield

has

established

operating

expertise.

Of

those

sectors,

utilities

will

be

a

significant

focus

and

transportation

would

be

a

much

smaller

allocation

in

the

portfolio

given

its

more

cyclical

nature.

Redemptions

are

subject

to

a

three-year

holding

period

from

the

acquisition

date.

(d)

The

fund

was

established

to

invest

and

reinvest

assets

of

the

investors

through

the

REIT,

primarily

in

interests

(including

ownership

or

leasehold

interests)

in

real

property,

which

is

to

be

planted

with

trees,

or

real

property

on

which

trees

are

growing

(timberland),

trees

growing

on

timberland,

or

trees

which

have

been

cut

but

not

removed

from

the

timberland

(timber);

contracts

or

agreements

for

the

cutting

and/or

use

of

timber

on

timberland.

Timber

investments

are

not

intended

to

produce

immediate

revenues.

Redemptions

are

subject

to

a

two-year

holding

period

from

the

acquisition

date.

(e)

The

fund

will

seek

to

invest

in

a

global,

diversified

portfolio

of

high-quality

core

and

core-plus

mid-market

infrastructure

investments

with

stable

returns,

inflation

protection,

low

volatility,

predictable

yield

and

a

low

correlation

with

other

asset

classes

through

an

open-end

structure.

Redemptions

are

subject

to

a

three-year

holding

period

from

the

acquisition

date.

(f)

The

fund

is

an

open-ended

investment

fund

whose

objective

is

to

generate

an

attractive

total

return

through

the

acquisition

and

management

of

farmland

in

the

Midwestern

United

States.

Redemptions

are

subject

to

a

one-year

holding

period

from

the

acquisition

date.

After

the

holding

period

has

expired,

redemptions

are

permitted

with

written

redemption

notice

five

months

prior

to

the

annual

redemption

date,

which

is

the

last

day

of

February.

(g)

This

feeder

fund

offers

hedging

to

protect

against

currency

movements

in

the

Global

Diversified

Infrastructure

Fund

which

invests

in

diversified

infrastructure

investments.

Redemptions

are

subject

to

a

three-year

holding

period

from

the

acquisition

date.

(h)

This

open-end

fund

blends

the

two

asset

classes

of

timberland

and

farmland.

The

geographic

focus

will

be

in

the

U.S.,

Canada,

Australia,

New

Zealand,

Chile,

Brazil,

Uruguay,

and

Western

Europe.

Agriculture

investments

will

be

diversified

among

row

crops

(corn,

soy,

wheat,

etc.),

permanent

crops

(vines/trees),

and

commodity

crops

(cotton,

lettuce,

strawberries,

etc.).

Redemptions

are

subject

to

a

three-year

holding

period

from

the

acquisition

date.

After

the

holding

period

has

expired,

redemptions

are

permitted

with

written

redemption

notice

given

by

April

30th

of

that

year.

Schedule

of

Investments

Principal

Diversified

Select

Real

Asset

Fund

March

31,

2022

See

accompanying

notes.

21

(i)

This

fund

is

comprised

of

loans

with

strong

fundamentals

and

focused

on

income

return.

Redemptions

are

available

if

inflows

of

capital

offset

the

requested

redemption

amount

and

if

liquidity

is

sufficient.

(j)

The

fund

was

organized

for

the

purpose

of

trading

and

investing

in

residual

tranches

and

other

notes

issued

by

and

with

respect

to

collateralized

loan

obligations.

Redemptions

are

subject

to

a

one-year

holding

period

from

the

acquisition

date.

(k)

This

open-end

fund

invests

primarily

in

U.S.

farmland.

It

is

a

well-diversified

portfolio

across

many

regions

of

the

country

and

diversified

across

row

crops,

vegetable

crops,

and

permanent

crops.

Redemptions

are

permitted

with

written

redemption

notice

60

days

prior

to

the

end

of

the

quarter.

(l)

This

open-end,

commingled

private

real

estate

portfolio

combines

value-add

properties

with

capital

appreciation

potential

and

more

stable

income-generating

properties.

Properties

in

the

portfolio

typically

start

as

development,

renovation,

repositioning,

or

lease-up

stage

investments,

and

transition

toward

stabilized

assets.

Redemptions

are

permitted

with

written

redemption

notice

60

days

prior

to

the

end

of

the

quarter.

Glossary

to

the

Schedule

of

Investments

March

31,

2022

See

accompanying

notes.

22

Currency

Abbreviations

USD/$

United

States

Dollar

See

accompanying

notes.

24

Financial

Highlights

Net

Asset

Value,

Beginning

of

Period

Net

Investment

Income

(Loss)

(a)

Net

Realized

and

Unrealized

Gain

(Loss)

on

Investments

Total

From

Investment

Operations

Dividends

from

Net

Investment

Income

Distributions

from

Realized

Gains

Tax

Return

of

Capital

Distribution

Total

Dividends

and

Distributions

Net

Asset

Value,

End

of

Period

PRINCIPAL

DIVERSIFIED

SELECT

REAL

ASSET

FUND

Class

A

shares

March

31,

2022

$

26.27‌

$

0.33‌

$

3.34‌

$

3.67‌

(

$

0.37‌)

(

$

1.48‌)

$

–‌

(

$

1.85‌)

$

28.09‌

March

31,

2021

19.35‌

0.49‌

7.18‌

7.67‌

(

0.52‌)

(

0.23‌)

–‌

(

0.75‌)

26.27‌

March

31,

2020(g)

25.00‌

0.36‌

(

5.61‌)

(

5.25‌)

(

0.35‌)

–‌

(

0.05‌)

(

0.40‌)

19.35‌

Class

Y

shares

March

31,

2022

26.42‌

0.47‌

3.36‌

3.83‌

(

0.42‌)

(

1.52‌)

–‌

(

1.94‌)

28.31‌

March

31,

2021

19.39‌

0.62‌

7.20‌

7.82‌

(

0.55‌)

(

0.24‌)

–‌

(

0.79‌)

26.42‌

March

31,

2020(g)

25.00‌

0.47‌

(

5.64‌)

(

5.17‌)

(

0.39‌)

–‌

(

0.05‌)

(

0.44‌)

19.39‌

Institutional

shares

March

31,

2022

26.33‌

0.42‌

3.33‌

3.75‌

(

0.41‌)

(

1.52‌)

–‌

(

1.93‌)

28.15‌

March

31,

2021

19.36‌

0.56‌

7.20‌

7.76‌

(

0.55‌)

(

0.24‌)

–‌

(

0.79‌)

26.33‌

March

31,

2020(g)

25.00‌

0.41‌

(

5.61‌)

(

5.20‌)

(

0.39‌)

–‌

(

0.05‌)

(

0.44‌)

19.36‌

See

accompanying

notes.

25

Financial

Highlights

(Continued)

Total

Return

Net

Assets,

End

of

Period

(in

thousands)

Ratio

of

Expenses

to

Average

Net

Assets

Ratio

of

Expenses

to

Average

Net

Assets

(Excluding

Interest

Expense

and

Fees)(b)

Ratio

of

Net

Investment

Income

to

Average

Net

Assets

Portfolio

Turnover

Rate

12.58‌

%

(c),(d),(e)

$

372‌

1.91‌

%

(f)

1.88‌

%

(f)

1.19‌

%

45.4‌

%

39.63‌

(c),(d)

276‌

1.67‌

(f)

N/A‌

2.11‌

56.0‌

(21.27‌)

(d),(h)

197‌

1.94‌

(f),(

i

)

N/A‌

1.87‌

(

i

)

56.8‌

(

i

)

13.13‌

(c),(e)

187,063‌

1.41‌

(f)

1.38‌

(f)

1.69‌

45.4‌

40.36‌

(c)

162,855‌

1.17‌

(f)

N/A‌

2.61‌

56.0‌

(20.98‌)

(h)

98,501‌

1.43‌

(f),(

i

)

N/A‌

2.47‌

(

i

)

56.8‌

(

i

)

12.93‌

(c),(e)

627‌

1.6

3‌

(f)

1.60‌

(f)

1.54‌

45.4‌

40.06‌

(c)

277‌

1.37‌

(f)

N/A‌

2.41‌

56.0‌

(21.10‌)

(h)

197‌

1.64‌

(f),(

i

)

N/A‌

2.17‌

(

i

)

56.8‌

(

i

)

(a)

Calculated

based

on

average

shares

outstanding

during

the

period.

(b)

Excludes

interest

expense

and

commitment

fees

charged

on

borrowings.

See

"Operating

Policies"

in

notes

to

financial

statements.

(c)

Total

return

is

calculated

using

the

traded

net

asset

value

which

may

differ

from

the

reported

net

asset

value.

The

traded

net

asset

value

is

the

net

asset

value

which

a

shareholder

would

have

paid

or

received

from

a

subscription

or

redemption.

(d)

Total

return

is

calculated

without

the

front-end

sales

charge

or

contingent

deferred

sales

charge.

(e)

Total

returns

calculated

using

the

reported

net

asset

values

as

of

March

31,

2022

are 14.32%

14.86%

and

14.62%

for

Class

A,

Class

Y

and

Institutional,

respectively.

(f)

Reflects

Manager's

contractual

expense

limit.

(g)

Period

from

June

25,

2019,

date

operations

commenced,

through

March

31,

2020.

(h)

Total

return

amounts

have

not

been

annualized.

(

i

)

Computed

on

an

annualized

basis.

Report

of

Independent

Registered

Public

Accounting

Firm

26

To

the

Shareholders

and

the

Board

of

Trustees

of

Principal

Diversified

Select

Real

Asset

Fund

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities

of

Principal

Diversified

Select

Real

Asset

Fund

(the

“Fund”),

including

the

schedule

of

investments,

as

of

March

31,

2022,

and

the

related

statements

of

operations

and

cash

flows

for

the

year

then

ended,

the

statements

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

then

ended,

the

financial

highlights

for

each

of

the

two

years

in

the

period

then

ended

and

the

period

from

June

25,

2019,

date

operations

commenced,

through

March

31,

2020,

and

the

related

notes

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

at

March

31,

2022,

the

results

of

its

operations

and

its

cash

flows

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

then

ended

and

its

financial

highlights

for

each

of

the

two

years

in

the

period

then

ended

and

the

period

from

June

25,

2019,

date

operations

commenced,

through

March

31,

2020,

in

conformity

with

U.S.

generally

accepted

accounting

principles.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(“PCAOB”)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

The

Fund

is

not

required

to

have,

nor

were

we

engaged

to

perform,

an

audit

of

the

Fund’s

internal

control

over

financial

reporting.

As

part

of

our

audits,

we

are

required

to

obtain

an

understanding

of

internal

control

over

financial

reporting

but

not

for

the

purpose

of

expressing

an

opinion

on

the

effectiveness

of

the

Fund’s

internal

control

over

financial

reporting.

Accordingly,

we

express

no

such

opinion.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

March

31,

2022,

by

correspondence

with

the

custodian,

transfer

agent,

investment

manager

of

the

private

investment

funds

and

brokers

or

by

other

appropriate

auditing

procedures

where

replies

from

brokers

were

not

received.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.

We

have

served

as

the

auditor

of

one

or

more

Principal

investment

companies

since

1969.

Minneapolis,

Minnesota

May

20,

2022

Shareholder

Expense

Example

Principal

Diversified

Select

Real

Asset

Fund

March

31,

2022

(unaudited)

27

As

a

shareholder

of

Principal

Diversified

Select

Real

Asset

Fund,

you

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

on

purchase

payments

and

contingent

deferred

sales

charges;

and

(2)

ongoing

costs,

including

management

fees;

distribution

fees;

and

other

fund

expenses.

In

addition

to

the

expenses

the

Fund

bears

directly,

the

Fund

may

indirectly

bear

its

pro

rata

share

of

the

expenses

incurred

by

the

investment

companies

in

which

the

Fund

invests.

This

Example

is

intended

to

help

you

understand

your

ongoing

costs

(in

dollars)

of

investing

in

Principal

Diversified

Select

Real

Asset

Fund

and

to

compare

these

costs

with

the

ongoing

costs

of

investing

in

other

funds.

The

Example

is

based

on

an

investment

of

$1,000

invested

at

the

beginning

of

the

period

and

held

for

the

entire

period

October

1,

2021

to

March

31,

2022

,

unless

otherwise

noted.

Actual

Expenses

The

first

section

of

the

table

below

provides

information

about

actual

account

values

and

actual

expenses.

You

may

use

the

information

in

this

section,

together

with

the

amount

you

invested,

to

estimate

the

expenses

that

you

paid

over

the

period.

Simply

divide

your

account

value

by

$1,000

(for

example,

an

$8,600

account

value

divided

by

$1,000

=

8.6),

then

multiply

the

result

by

the

number

in

the

first

section

under

the

heading

entitled

“Expenses

Paid

During

Period”

to

estimate

the

expenses

you

paid

on

your

account

during

this

period.

Additional

account

fees

may

apply

to

certain

types

of

investment

products

which

are

not

included

in

the

table

below.

If

they

were,

the

estimate

of

expenses

you

paid

during

the

period

would

be

higher,

and

your

ending

account

value

lower,

by

this

amount.

Hypothetical

Example

for

Comparison

Purposes

The

second

section

of

the

table

below

provides

information

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

The

hypothetical

account

values

and

expenses

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period.

You

may

use

this

information

to

compare

the

ongoing

costs

of

investing

in

the

Fund

and

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

the

other

funds.

Please

note

that

the

expenses

shown

in

the

table

are

meant

to

highlight

your

ongoing

costs

only

and

do

not

reflect

any

transaction

costs,

such

as

sales

charges

on

purchase

payments,

contingent

deferred

sales

charges,

redemption

fees

or

exchange

fees.

Therefore,

the

second

section

of

the

table

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

determine

the

relative

total

costs

of

owning

different

funds.

In

addition,

if

these

transaction

costs

were

included,

your

costs

would

have

been

higher.

Actual

Hypothetical

Beginning

Account

Value

October

1,

2021

Ending

Account

Value

March

31,

2022

Expenses

Paid

During Period

October

1,

2021 to

March

31,

2022

(a)

Beginning

Account

Value

October

1,

2021

Ending

Account

Value

March

31,

2022 

Expenses

Paid

During Period

October

1,

2021 to

March

31,

2022

(a)

Annualized

Expense

Ratio

Principal

Diversified

Select

Real

Asset

Fund

Class

A

$

1,000.00‌

$

1,059.11‌

$

10.32‌

$

1,000.00‌

$

1,014.91‌

$

10.10‌

2.01‌

%

Class

Y

1,000.00‌

1,061.48‌

7.76‌

1,000.00‌

1,017.40‌

7.59‌

1.51‌

Institutional

1,000.00‌

1,060.53‌

8.78‌

1,000.00‌

1,016.40‌

8.60‌

1.71‌

Principal

Diversified

Select

Real

Asset

Fund

(Excluding

Interest

Expense

and

Fees)

Class

A

1,000.00‌

1,059.11‌

10.16‌

1,000.00‌

1,015.06‌

9.95‌

1.98‌

Class

Y

1,000.00‌

1,061.48‌

7.61‌

1,000.00‌

1,017.55‌

7.44‌

1.48‌

Institutional

1,000.00‌

1,060.53‌

8.63‌

1,000.00‌

1,016.55‌

8.45‌

1.68‌

(a)

Expenses

are

equal

to

a

fund's

annualized

expense

ratio

multiplied

by

the

average

account

value

over

the

period,

multiplied

by

182/365

(to

reflect

the

one-half

year

period).

Principal

Diversified

Select

Real

Asset

Fund

(unaudited)

28

Notification

of

Source

of

Distributions

Pursuant

to

Rule

19a-1

of

the

Investment

Company

Act

of

1940

As

noted

in

the

table

provided

below,

Principal

Diversified

Select

Real

Asset

Fund

made

distributions

for

the

months

of

December

2021

and

March

2022

for

which

a

portion

is

estimated

to

be

in

excess

of

the

Fund’s

current

and

accumulated

net

income.

As

of

these

month

ends,

the

estimated

sources

of

these

distributions

were

as

follows:

The

ultimate

composition

of

these

distributions

may

vary

from

the

estimates

provided

above

due

to

a

variety

of

factors

including

future

income

and

expenses,

and

realized

gains

and

losses

from

the

purchase

and

sale

of

securities.

Please

note

that

this

information

is

being

provided

to

satisfy

certain

notice

requirements

under

the

Investment

Company

Act

of

1940.

Tax

reporting

information

for

shareholders

of

the

Fund

will

not

be

available

until

the

end

of

the

Fund’s

fiscal

year.

As

a

result,

shareholders

should

not

use

the

information

provided

in

this

notice

for

tax

reporting

purposes.

December

2021

Fund

Net

Income

Realized

Gain

Capital

Sources

Principal

Diversified

Select

Real

Asset

Fund

0.00%

100.00%

0.00%

March

2022

Fund

Net

Income

Realized

Gain

Capital

Sources

Principal

Diversified

Select

Real

Asset

Fund

0.00%

100.00%

0.00%

29

FUND

BOARD

OF

TRUSTEES

AND

OFFICERS

The

Board

of

Trustees

(the

“Board”)

has

overall

responsibility

for

overseeing

the

Fund’s

operations

in

accordance

with

the

Investment

Act

of

1940,

as

amended

(the

“1940

Act”),

other

applicable

laws,

and

the

Fund’s

charter.

Each

member

of

the

Board

(“Board

Member”)

serves

on

the

Board

of

the

following

investment

companies

sponsored

by

Principal

Life

Insurance

Company:

Principal

Funds,

Inc.,

Principal

Variable

Contracts

Funds,

Inc.,

Principal

Exchange-Traded

Funds,

and

Principal

Diversified

Select

Real

Asset

Fund

which

are

collectively

referred

to

as

the

“Fund

Complex”.

Board

Members

that

are

affiliated

persons

of

any

investment

advisor,

the

principal

distributor,

or

the

principal

underwriter

of

the

Fund

Complex

are

considered

“interested

persons”

of

the

Fund

(as

defined

in

the

1940

Act)

and

are

shown

below

as

“Interested

Board

Members”.

Board

Members

who

are

not

Interested

Board

Members

are

shown

below

as

“Independent

Board

Members”.

Each

Board

Member

generally

serves

until

the

next

annual

meeting

of

stockholders

or

until

such

Board

Member’s

earlier

death,

resignation,

or

removal.

Independent

Board

Members

have

a

72-year

age

limit

and,

for

Independent

Board

Members

elected

on

or

after

September

14,

2021,

a

72-year

age

limit

or

a

15-year

term

limit,

whichever

occurs

first.

The

Board

may

waive

the

age

or

term

limits

in

the

Board’s

discretion.

Officers

serve

at

the

pleasure

of

the

Board,

and

each

officer

has

the

same

position

with

each

investment

company

in

the

Fund

Complex.

INDEPENDENT

BOARD

MEMBERS

Name,

Position

Held

with

the

Fund

Complex,

Year

of

Birth

Principal

Occupation(s)

During

past

5

years

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member

Other

Directorships

Held

by

Board

Member

During

Past

5

Years

Leroy

T.

Barnes,

Jr.

Board

Member

since

2012

Member,

Audit

Committee

1951

Retired

127

McClatchy

Newspapers,

Inc.;

Frontier

Communications,

Inc.;

formerly,

Herbalife

Ltd.

Craig

Damos

Lead

Independent

Board

Member

since

2020

Board

Member

since

2008

Member,

Nominating

and

Governance

Committee

Member,

Operations

Committee

Member,

Executive

Committee

1954

President,

C.P.

Damos

Consulting

LLC

127

None

Fritz

S.

Hirsch

Board

Member

since

2005

Member,

Nominating

and

Governance

Committee

Chair,

15(c)

Committee

1951

Interim

CEO,

MAM

USA:

February

2020

to

October

2020

127

MAM

USA

Victor

Hymes

Board

Member

since

2020

Chair,

Audit

Committee

Member,

Nominating

and

Governance

Committee

1957

Founder

and

Managing

Member

of

Legato

Capital

Management,

LLC

127

Formerly,

Montgomery

Street

Income

Securities

Inc.

Padelford

(“Padel”)

L.

Lattimer

Board

Member

since

2020

Member,

Operations

Committee

Member,

15(c)

Committee

1961

TBA

Management

Consulting

LLC

127

None

Karen

(“Karrie”)

McMillan

Board

Member

since

2014

Chair,

Operations

Committee

Member,

15(c)

Committee

1961

Founder/Owner,

Tyche

Consulting

LLC

Formerly,

Managing

Director,

Patomak

Global

Partners,

LLC

127

None

30

INTERESTED

BOARD

MEMBERS

Correspondence

intended

for

each

Board

Member

who

is

other

than

an

Interested

Board

Member

may

be

sent

to

655

9th

Street,

Des

Moines,

IA

50392.

Name,

Position

Held

with

the

Fund

Complex,

Year

of

Birth

Principal

Occupation(s)

During

past

5

years

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member

Other

Directorships

Held

by

Board

Member

During

Past

5

Years

Elizabeth

A.

Nickels

Board

Member

since

2015

Member,

Audit

Committee

Chair,

Nominating

and

Governance

Committee

1962

Retired

127

SpartanNash;

Formerly:

Charlotte

Russe;

Follet

Corporation;

PetSmart;

Spectrum

Health

Systems

Mary

M.

(“Meg”)

VanDeWeghe

Board

Member

since

2018

Member,

Audit

Committee

Member,

15(c)

Committee

1959

CEO

and

President,

Forte

Consulting,

Inc.

127

Helmerich

&

Payne;

Formerly:

B/E

Aerospace;

Brown

Advisory;

Denbury

Resources

Inc.;

Nalco

(and

its

successor

Ecolab);

and

WP

Carey

Name,

Position

Held

with

the

Fund

Complex,

Year

of

Birth

Principal

Occupation(s)

During

past

5

years

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member

Other

Directorships

Held

by

Board

Member

During

Past

5

Years

Timothy

M.

Dunbar

Chair

and

Board

Member

since

2019

Chair,

Executive

Committee

1957

President-Principal

Global

Asset

Management

(“PGAM”),

Principal

Global

Investors,

LLC

(“PGI”)

(2018-2021)

Director,

PGI

(2018-2020)

Division

President,

Principal

Financial

Services,

Inc.

(“PFSI)

and

Principal

Life

Insurance

Company

(“PLIC”)

(2020–2021)

Executive

Vice

President

and

Chief

Investment

Officer,

PFSI

and

PLIC

(2014-2018)

President

–

PGAM,

PFSI

and

PLIC

(2018-2020)

Director,

Post

Advisory

Group,

LLC

(“Post”)

(2018-

2020)

Chair

and

Executive

Vice

President,

RobustWealth,

Inc.

(2018-2020)

127

None

Patrick

G.

Halter

Board

Member

since

2017

Member,

Executive

Committee

1959

Chair,

PGI

since

2018

Chief

Executive

Officer

and

President,

PGI

and

Principal

Real

Estate

Investors,

LLC

(“PREI”)

since

2018

Chief

Operating

Officer,

PGI

(2017-2018)

Director,

PGI

(2003-2018)

Director,

Origin

Asset

Management

LLP

(2018-

2019)

President,

PGAM,

PFSI,

and

PLIC

since

2020

Chief

Executive

Officer

and

President,

PLIC

(2018-

2020)

Chair,

Post

(2017-2020)

Director,

Post

since

2017

Chair,

PREI

since

2004

Chief

Executive

Officer,

PREI

(2005-2018)

Chair,

Spectrum

Asset

Management,

Inc.

(“Spectrum”)

since

2017

127

None

31

FUND

COMPLEX

OFFICERS

Name,

Position

Held

with

the

Fund

Complex,

Address,

and

Year

of

Birth

Principal

Occupation(s)

During

past

5

years

Kamal

Bhatia

President

and

Chief

Executive

Officer

Des

Moines,

IA

50392

1972

Director,

PGI

since

2019

President-Principal

Funds,

PGI

since

2019

Principal

Executive

Officer,

OPC

Private

Capital

(2017-2019)

Senior

Vice

President,

OppenheimerFunds

(2011-

2019)

Director,

Principal

Funds

Distributor,

Inc.

(“PFD”)

since

2019

Senior

Executive

Director

and

Chief

Operating

Officer,

PFSI

and

PLIC

since

2020

President,

Principal

Funds,

PFSI,

and

PLIC

(2019-

2020)

Director,

Post

since

2020

Director,

PREI

since

2020

Chair

and

Executive

Vice

President,

Principal

Shareholder

Services,

Inc.

(“PSS”)

since

2019

Director,

Spectrum

since

2021

Randy

D.

Bolin

Assistant

Tax

Counsel

Des

Moines,

IA

50392

1961

Vice

President

and

Associate

General

Counsel,

PGI

since

2016

Vice

President

and

Associate

General

Counsel,

PFSI

since

2013

Vice

President

and

Associate

General

Counsel,

PLIC

since

2013

Beth

Graff

Vice

President

and

Assistant

Controller

Des

Moines,

IA

50392

1968

Director

–

Fund

Accounting,

PLIC

since

2016

Gina

L.

Graham

Treasurer

Des

Moines,

IA

50392

1965

Vice

President

and

Treasurer,

PGI

since

2016

Vice

President

and

Treasurer,

PFD

since

2016

Vice

President

and

Treasurer,

PFSI

since

2016

Vice

President

and

Treasurer,

PLIC

since

2016

Vice

President

and

Treasurer,

PREI

since

2017

Vice

President

and

Treasurer,

Principal

Securities,

Inc.

(“PSI”)

since

2016

Vice

President

and

Treasurer,

PSS

since

2016

Vice

President

and

Treasurer,

RobustWealth,

Inc.

since

2018

Megan

Hoffmann

Vice

President

and

Controller

Des

Moines,

IA

50392

1979

Director

–

Accounting,

PLIC

since

2020

Assistant

Director

–

Accounting,

PLIC

(2017-2020)

Laura

B.

Latham

Assistant

Counsel

and

Assistant

Secretary

Des

Moines,

IA

50392

1986

Counsel,

PGI

since

2018

Counsel,

PLIC

since

2018

Diane

K.

Nelson

AML

Officer

Des

Moines,

IA

50392

1965

Chief

Compliance

Officer/AML

Officer,

PSS

since

2015

Tara

Parks

Vice

President

and

Assistant

Controller

Des

Moines,

IA

50392

1983

Director

–

Accounting,

PLIC

since

2019

Tax

Manager

–

ALPS

Fund

Services

(2011-2019)

Sara

L.

Reece

Vice

President

and

Chief

Operating

Officer

Des

Moines,

IA

50392

1975

Vice

President

and

Controller

(2016-2021)

Managing

Director

–

Global

Funds

Ops,

PLIC

since

2021

Managing

Director

–

Financial

Analysis/

Planning,

PLIC

(2021)

Director

-

Accounting,

PLIC

(2015-2021)

32

Name,

Position

Held

with

the

Fund

Complex,

Address,

and

Year

of

Birth

Principal

Occupation(s)

During

past

5

years

Teri

R.

Root

Chief

Compliance

Officer

Des

Moines,

IA

50392

1979

Interim

Chief

Compliance

Officer

-

Funds

(2018)

Deputy

Chief

Compliance

Officer

–

Funds

(2015-

2018)

Chief

Compliance

Officer

–

Funds,

PGI

since

2018

Deputy

Chief

Compliance

Officer,

PGI

(2017-2018)

Vice

President,

PSS

since

2015

Michael

Scholten

Chief

Financial

Officer

Des

Moines,

IA

50392

1979

Chief

Financial

Officer

–

PFD

since

2016

Assistant

Vice

President

and

Actuary,

PLIC

since

2021

Chief

Financial

Officer

–

Funds/Platforms,

PLIC

since

2015

Chief

Financial

Officer,

PSS

since

2015

Adam

U.

Shaikh

Assistant

Counsel

Des

Moines,

IA

50392

1972

Assistant

General

Counsel,

PGI

since

2018

Counsel,

PGI

(2017-2018)

Counsel,

PLIC

since

2006

John

L.

Sullivan

Assistant

Counsel

and

Assistant

Secretary

Des

Moines,

IA

50392

1970

Counsel,

PGI

since

2020

Counsel,

PLIC

since

2019

Prior

thereto,

Attorney

in

Private

Practice

Dan

L.

Westholm

Assistant

Treasurer

Des

Moines,

IA

50392

1966

Assistant

Vice

President-Treasury,

PGI

since

2013

Assistant

Vice

President-Treasury,

PFD

since

2013

Assistant

Vice

President-Treasury,

PLIC

since

2014

Assistant

Vice

President-Treasury,

PSI

since

2013

Assistant

Vice

President-Treasury,

PSS

since

2013

Beth

C.

Wilson

Vice

President

and

Secretary

Des

Moines,

IA

50392

1956

Director

and

Secretary

–

Funds,

PLIC

since

2007

Clint

L.

Woods

Counsel,

Vice

President,

and

Assistant

Secretary

Des

Moines,

IA

50392

1961

Of

Counsel

(2015-2018)

Vice

President

(2016-2017)

Counsel

(2015-2017)

Vice

President,

Associate

General

Counsel,

and

Assistant

Secretary,

PGI

since

2021

Vice

President,

Associate

General

Counsel

and

Secretary,

PGI

(2020-2021)

PSI

since

2021

PSS

since

2021

Vice

President,

Associate

General

Counsel,

Governance

Officer

and

Secretary,

PREI

since

2020

Vice

President,

Associate

General

Counsel,

Governance

Officer,

and

Assistant

Corporate

Secretary,

PGI

(2018-2020)

PFSI

since

2015

PLIC

since

2015

PREI

(2020)

Vice

President,

Associate

General

Counsel

and

Assistant

Corporate

Secretary,

PFD

since

2019

PSI

(2019-2021)

PSS

(2019-2021)

RobustWealth,

Inc.

since

2019

Secretary,

Post

(2020-2021)

Spectrum

(2020-2021)

Assistant

Secretary,

Post

since

2021

Spectrum

since

2021

Jared

A.

Yepsen

Assistant

Tax

Counsel

Des

Moines,

IA

50392

1981

Counsel,

PGI

(2017-2019)

Counsel,

PLIC

since

2015

33

The

15(c)

Committee’s

primary

purpose

is

to

assist

the

Board

in

performing

the

annual

review

of

the

Fund’s

advisory

and

sub-advisory

agreements

pursuant

to

Section

15(c)

of

the

1940

Act.

The

Committee

responsibilities

include

requesting

and

reviewing

related

materials.

The

Audit

Committee’s

primary

purpose

is

to

assist

the

Board

by

serving

as

an

independent

and

objective

party

to

monitor

the

Fund

Complex’s

accounting

policies,

financial

reporting

and

internal

control

system,

as

well

as

the

work

of

the

independent

registered

public

accountants.

The

Audit

Committee

assists

Board

oversight

of

1)

the

integrity

of

the

Fund

Complex’s

financial

statements;

2)

the

Fund

Complex’s

compliance

with

certain

legal

and

regulatory

requirements;

3)

the

independent

registered

public

accountants’

qualifications

and

independence;

and

4)

the

performance

of

the

Fund

Complex’s

independent

registered

public

accountants.

The

Audit

Committee

also

provides

an

open

avenue

of

communication

among

the

independent

registered

public

accountants,

the

Manager’s

internal

auditors,

Fund

Complex

management,

and

the

Board.

The

Executive

Committee’s

primary

purpose

is

to

exercise

certain

powers

of

the

Board

when

the

Board

is

not

in

session.

When

the

Board

is

not

in

session,

the

Committee

may

exercise

all

powers

of

the

Board

in

the

management

of

the

Fund

Complex's

business

except

the

power

to

1)

issue

stock,

except

as

permitted

by

law;

2)

recommend

to

the

stockholders

any

action

which

requires

stockholder

approval;

3)

amend

the

bylaws;

or

4)

approve

any

merger

or

share

exchange

which

does

not

require

stockholder

approval.

The

Nominating

and

Governance

Committee’s

primary

purpose

is

to

oversee

the

structure

and

efficiency

of

the

Board

and

the

committees.

The

Committee

is

responsible

for

evaluating

Board

membership

and

functions,

committee

membership

and

functions,

insurance

coverage,

and

legal

matters.

The

Committee's

nominating

functions

include

selecting

and

nominating

Independent

Board

Member

candidates

for

election

to

the

Board.

Generally,

the

Committee

requests

nominee

suggestions

from

Board

Members

and

management.

In

addition,

the

Committee

considers

candidates

recommended

by

shareholders

of

the

Fund

Complex.

Recommendations

should

be

submitted

in

writing

to

the

Principal

Funds

Complex

Secretary,

in

care

of

the

Principal

Funds

Complex,

711

High

Street,

Des

Moines,

IA

50392.

Such

recommendations

must

include

all

information

specified

in

the

Committee’s

charter

and

must

conform

with

the

procedures

set

forth

in

Appendix

A

thereto,

which

can

be

found

at

https://www.principalglobal.com/documentdownload/160950.

Examples

of

such

information

include

the

nominee’s

biographical

information;

relevant

educational

and

professional

background

of

the

nominee;

the

number

of

shares

of

each

Fund

owned

of

record

and

beneficially

by

the

nominee

and

by

the

recommending

shareholder;

any

other

information

regarding

the

nominee

that

would

be

required

to

be

disclosed

in

a

proxy

statement

or

other

filing

required

to

be

made

in

connection

with

the

solicitation

of

proxies

for

the

election

of

board

members;

whether

the

nominee

is

an

“interested

person”

of

the

Fund

as

defined

in

the

1940

Act;

and

the

written

consent

of

the

nominee

to

be

named

as

a

nominee

and

serve

as

a

board

member

if

elected.

When

evaluating

a

potential

nominee

for

Independent

Board

Member,

the

Committee

may

consider,

among

other

factors:

educational

background;

relevant

business

and

industry

experience;

whether

the

person

is

an

"interested

person"

of

the

Fund

as

defined

in

the

1940

Act;

and

whether

the

person

is

willing

to

serve,

and

willing

and

able

to

commit

the

time

necessary

to

attend

meetings

and

perform

the

duties

of

an

Independent

Board

Member. In

addition,

the

Committee

may

consider

whether

a

candidate’s

background,

experience,

skills

and

views

would

complement

the

background,

experience,

skills

and

views

of

other

Board

Members

and

would

contribute

to

the

diversity

of

the

Board. The

Committee

meets

with

nominees

and

conducts

a

reference

check.

The

final

decision

is

based

on

a

combination

of

factors,

including

the

strengths

and

the

experience

an

individual

may

bring

to

the

Board. 

The

Board

does

not

regularly

use

the

services

of

professional

search

firms

to

identify

or

evaluate

potential

candidates

or

nominees.

The

Operations

Committee’s

primary

purpose

is

to

oversee

the

provision

of

administrative

and

distribution

services

to

the

Fund

Complex,

communications

with

the

Fund

Complex’s

shareholders,

and

review

and

oversight

of

the

Fund

Complex’s

operations.

Additional

information

about

the

Fund

is

available

in

the

Prospectus

and

the

Statement

of

Additional

Information

dated

August

1,

2021

and

as

supplemented.

These

documents

may

be

obtained

free

of

charge

by

writing

Principal

Diversified

Select

Real

Asset

Fund,

P.O.

Box

219971,

Kansas

City,

MO

64121-9971

or

telephoning

1-800-222-5852.

The

prospectus

may

be

viewed

at

www.PrincipalFunds.com/interval-funds.

PROXY

VOTING

POLICIES

A

description

of

the

policies

and

procedures

the

Fund

uses

to

determine

how

to

vote

proxies

relating

to

portfolio

securities

and

the

results

of

the

proxy

votes

for

the

most

recent

twelve

months

ended

June

30

may

be

obtained

free

of

charge

by

telephoning

1-800-222-5852,

or

on

the

Securities

and

Exchange

Commission

website

at

www.sec.gov.

SCHEDULES

OF

INVESTMENTS

The

Fund

files

complete

schedules

of

investments

with

the

Securities

and

Exchange

Commission

(“SEC”)

for

the

first

and

third

quarters

of

each

fiscal

year

as

an

exhibit

to

its

reports

on

Form

N-PORT.

The

Fund’s

Form

N-PORT

reports

are

available

on

the

SEC

website

at

www.

sec.gov.

Federal

Income

Tax

Information

Principal

Diversified

Select

Real

Asset

Fund

March

31,

2022

(unaudited)

34

Long-Term

Capital

Gain

Dividends.

The

Fund

distributed

long-term

capital

gain

dividends

during

the

fiscal

year

ended

March

31,

2022

.

Details

of

designated

long-term

capital

gain

dividends

for

federal

income

tax

purposes

are

shown

in

the

Notes

to

Financial

Statements.

To

the

extent

necessary

to

distribute

such

capital

gains,

the

Fund

may

also

utilize,

and

hereby

designate,

earnings

and

profits

distributed

to

shareholders

on

redemptions

of

shares

as

part

of

the

Dividends

Paid

Deduction.

Dividends

Received

Deduction

(“DRD”).

For

corporate

shareholders,

the

Fund

designates

the

following

as

a

percentage

of

taxable

ordinary

income

distributions

(dividend

income

and

short-term

gains,

if

any),

or

up

to

the

maximum

amount

allowable,

as

DRD

eligible

for

the

calendar

year

ended

December

31,

2021:

Qualified

Dividend

Income

(“QDI”).

Certain

dividends

paid

by

the

Fund

may

be

subject

to

a

maximum

tax

rate

of

20%.

The

Fund

designates

the

following

as

a

percentage

of

taxable

ordinary

income

distributions

(dividend

income

and

short-term

gains,

if

any),

or

up

to

the

maximum

amount

allowable,

as

QDI

eligible

for

the

calendar

year

ended

December

31,

2021:

Section

163(j)

Interest

Dividends.

The

Fund

intends

to

pass

through

Section

163(j)

Interest

Dividends

as

defined

in

Proposed

Treasury

Regulation

§1.163(j)-1(b).

The

Fund

designates

the

following

as

a

percentage

of

taxable

ordinary

income

distributions

(dividend

income

and

short-term

gains,

if

any),

or

up

to

the

maximum

amount

allowable,

as

QDI

eligible

for

the

calendar

year

ended

December

31,

2021:

In

early

2022,

if

applicable,

shareholders

of

record

received

the

above

information

on

QDI,

Foreign

Tax

Credit,

and

Section

199A

for

the

distribution

paid

to

them

by

the

Fund

during

the

calendar

year

2021

via

Form

1099.

This

information

is

given

to

meet

certain

requirements

of

the

Internal

Revenue

Code

and

should

not

be

used

by

shareholders

for

preparing

their

income

tax

returns.

For

tax

return

preparation

purposes,

please

refer

to

the

information

supplied

with

the

Form

1099-DIV

you

will

receive

from

the

Fund's

transfer

agent.

The

latest

tax

reporting

supplement

is

available

on

Principal's

Tax

Center

website.

Website:

https://www.principalfunds.com/individual-investor/customer-support/tax-center

Please

consult

your

tax

advisor

if

you

have

any

questions.

DRD

Principal

Diversified

Select

Real

Asset

Fund

35.67%

QDI

Principal

Diversified

Select

Real

Asset

Fund

62.46%

163(j)

Interest

Dividends

Principal

Diversified

Select

Real

Asset

Fund

10.59

%

Principal

Funds

Distributor,

Inc.

711

High

Street

Des

Moines,

IA

50392-6370

Do

not

use

this

address

for

business

correspondence

principalfunds.com

Investing

involves

risk,

including

possible

loss

of

principal.

This

shareholder

report

is

published

as

general

information

for

the

shareholders

of

Principal

Diversified

Select

Real

Asset

Fund.

This

material

is

not

authorized

for

distribution

unless

preceded

or

accompanied

by

a

current

prospectus

or

a

summary

prospectus

that

includes

more

information

regarding

the

risk

factors,

expenses,

policies,

and

objectives

of

the

funds.

Investors

should

read

the

prospectus

or

summary

prospectus

carefully

before

investing.

To

obtain

a

prospectus

or

summary

prospectus,

please

contact

your

financial

professional

or

call

800-222-5852.

Principal

Funds

are

distributed

by

Principal

Funds

Distributor,

Inc.

Principal

®

,

Principal

Financial

Group

®

,

and

Principal

and

the

logomark

design

are

registered

trademarks

of

Principal

Financial

Services,

Inc.,

a

Principal

Financial

Group

company,

in

the

United

States

and

are

trademarks

and

services

marks

of

Principal

Financial

Services,

Inc.,

in

various

countries

around

the

world.

©

2022

Principal

Financial

Services,

Inc.

|

INF100AR-02

|

03/2022

|

1571889

ITEM 2 – CODE OF ETHICS

(a) The Registrant has adopted a code of ethics (the "Code of Ethics") that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

(b) Not applicable.

(c) The Registrant has not amended, as described in Item 2(c) of Form N-CSR, its Code of Ethics during the period covered by the shareholder report presented in Item 1 hereto.

(d) The Registrant has not granted a waiver or an implicit waiver from a provision of its Code of Ethics during the period covered by the shareholder report presented in Item 1 hereto.

(e) Not applicable.

(f) The Registrant's Code of Ethics is attached as an Exhibit hereto in response to Item 13(a)(1).

ITEM 3 – AUDIT COMMITTEE FINANCIAL EXPERT

The Registrant's Board has determined that Elizabeth Nickels, a member of the Registrant's Audit Committee, is an "audit committee financial expert" and "independent," as such terms are defined in this Item.

ITEM 4 – PRINCIPAL ACCOUNTANT FEES AND SERVICES

(a) Audit Fees.

Ernst & Young is the principal accountant for the registrant. As such, Ernst & Young has audited the financial statements of the registrant and reviewed regulatory filings that include those financial statements. During the last two fiscal years, Ernst & Young has billed the following amounts for their professional services.

March 31, 2022 - $100,000

March 31, 2021 - $129,100

(b) Audit-Related Fees.

Ernst & Young provided audit-related services to the registrant that are not included in response to item 4(a). Those services related to the review of Form N-2. During the last two fiscal years, Ernst & Young has billed the following amounts for those services.

March 31, 2022 - $0

March 31, 2021 - $0

Ernst & Young billed no fees that registrant’s audit committee was required to pre-approve pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.

(c) Tax Fees.

Ernst & Young prepares and reviews the federal income tax returns and federal excise tax returns of the registrant. In connection with this service, Ernst & Young prepares and reviews the calculation of the registrant’s dividend distributions that are included as deductions on the tax returns. Ernst & Young also provides services to identify passive foreign investment companies. Ernst & Young also provides services to understand and comply with tax laws in certain foreign countries and services to determine the taxability of corporate actions. During the last two fiscal years, Ernst & Young has billed the following amounts for their professional tax services.

March 31, 2022 - $11,699

March 31, 2021 - $10,588

Ernst & Young billed no fees that registrant’s audit committee was required to pre-approve pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.

(d) All Other Fees.

Ernst & Young has not billed the registrant for other products or services during the last two fiscal years.

Ernst & Young billed no fees that registrant’s audit committee was required to pre-approve pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.

(e) (1) Audit Committee Pre-Approval Policy.

  The audit committee of the registrant has adopted the following pre-approval policy:

The Principal Funds

Policy on Auditor Independence

The purpose of this policy is to ensure the independence of the Principal Funds' primary independent auditor.  This policy is established by the Audit Committee (the "Committee") of the Boards of Directors of Principal Funds, Inc. and Principal Variable Contracts Funds, Inc. and the Boards of Trustees of Principal Exchange-Traded Funds and any registered closed‑end management investment company that is operated as an interval fund and managed by Principal Global Investors, LLC

[1]

 (the “Funds”) (the “Boards of the Funds”) effective for all engagements of the primary independent auditor.

1.         The primary independent auditor, its subsidiaries and affiliates shall not provide Prohibited Services to the Funds.  For the purposes of this policy, Prohibited Services are:

·

Services that are subject to audit procedure during a financial statement audit;

·

Services where the auditor would act on behalf of management;

·

Services where the auditor is an advocate to the client's position in an adversarial proceeding;

·

Bookkeeping or other services related to the accounting records or financial statements of the Funds, its subsidiaries and affiliates;

·

Financial information systems design and implementation;

·

Appraisal or valuation services, fairness opinions, or contribution-in-kind reports;

·

Actuarial services;

·

Internal audit functions or human resources;

·

Broker or dealer, investment advisor, or investment banking services;

·

Legal services and expert services unrelated to the audit;

·

Tax planning services related to listed, confidential and aggressive transactions;

·

Personal tax planning services to individuals in a financial reporting oversight role with regard to the Funds (other than members of the Boards of the Funds who are not also officers of the Funds), including the immediate family members of such individuals;

·

Any other service that the Public Company Accounting Oversight Board (PCAOB) determines, by regulation, is impermissible.

2.         (A) All services the primary independent auditor, its subsidiaries and affiliates provide to the Funds, and (B) Audit services, including audits of annual financial statements, audits of acquired or divested businesses or review of regulatory filings, any independent auditor provides, shall be approved by the Committee in advance in accordance with the following procedure:

Each quarter, Management will present to the Committee for pre-approval, a detailed description of each particular service, excluding tax services, for which pre-approval is sought and a range of fees for such service.  The Committee may delegate pre-approval authority to one or more of its members provided such delegated member(s) shall present a report of any services approved to the full Committee at its next regularly scheduled meeting.  The Committee Chairperson shall have pre-approval authority for changes to any range of fees applicable to services the Committee previously approved and for new services and the range of fees for such services that arise between regularly scheduled Committee meetings.

Similarly, the primary independent auditor will present to the Committee for pre-approval a written description of the nature and scope of all tax services not expressly prohibited, including the fee arrangements for such services, and the potential effects of such services on the audit firm’s independence.

In considering whether to pre-approve the primary independent auditor’s provision of non-audit services, the Committee will consider whether the services are compatible with the maintenance of such auditor's independence.  The Committee will also consider whether the primary independent auditor is best positioned to provide the most effective and efficient service, for reasons such as its familiarity with the Funds' business, people, culture, accounting systems, risk profile and other factors, and whether the service might enhance the Funds' ability to manage or control risk or improve audit quality.

3.         The provisions of this policy shall apply to all audit and non-audit services provided directly to the Funds.  Additionally, the provisions of this policy shall apply to non-audit services provided to Principal Global Investors, LLC (“PGI”) or an affiliate of PGI that provides ongoing services to the Funds if the engagement relates directly to the operations and financial reporting of the Funds.

4.         Not less than annually, the primary independent auditor shall report to the Committee in writing all relationships that may reasonably be thought to bear on independence between the auditor and the Funds or persons in financial reporting oversight roles with respect to any services provided by the auditor, its subsidiaries or affiliates as of the date of the communication, pursuant to Rule 3526 of the PCAOB.  The primary independent auditor shall discuss with the Committee the potential effects of such relationships on the independence of the auditor.  In addition, the primary independent auditor shall affirm, in writing, that, as of the date of the communication, it is independent within the meaning of the federal securities laws and Rule 3520 of the PCAOB.

5.         The Committee shall ensure that the lead (or coordinating) audit partners, as well as the reviewing audit partner, of the Funds' primary independent auditor are rotated at least every five years and subject upon rotation to a five year "time out" period.  All other audit partners of the primary independent auditor, excluding partners who simply consult with others on the audit engagement regarding technical issues, shall rotate after seven years and be subject upon rotation to a two year "time out" period.

6.

Neither the Funds nor PGI may hire or promote any former partner, principal, shareholder or professional employee (Former Employee) of the primary independent auditor into a financial reporting oversight role unless the Former Employee (1) has severed his/her economic interest in the independent audit firm, and (2) was not a member of the audit engagement team for the Funds during the one year period preceding the date that the audit procedures began for the fiscal period in which the Funds or PGI proposes to hire or promote the Former Employee.  Neither the Funds nor PGI shall, without prior written consent of the primary independent auditor, hire or promote any Former Employee into a role not prohibited above if the Former Employee had provided any services to the Funds or PGI during the 12 months preceding the date of filing of the Funds' most recent annual report with the SEC.  Upon termination of the primary independent auditor, the Funds or PGI shall not, without prior written consent of the former primary independent auditor, hire or promote any Former Employee for a period of up to 12 months from termination.

7.

For persons recently promoted or hired into a financial reporting oversight role (other than members of the Boards of the Funds who are not also officers of the Funds), any personal tax planning services pursuant to an engagement that was in progress before the hiring or promotion and provided by the primary independent auditor must be completed on or before 180 days after the hiring or promotion.

8.

The phrase "financial reporting oversight role" means a role in which a person is in a position to exercise influence over the contents of the financial statements or anyone who prepares them, such as a member of the board of directors or similar management or governing body, chief executive officer, president, chief operating officer, chief financial officer, counsel, controller, chief internal auditor, or any equivalent positions.

(Adopted by the Audit Committee of the Boards of the Funds on March 10, 2020).

(End of policy)

(e) (2) Pre-Approval Waivers.

There were no services provided to the registrant by Ernst & Young that were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f)

Substantially all work in connection with the audit of the registrant’s financial statements was performed by full-time employees of Ernst & Young.

(g)

The aggregate non-audit fees Ernst & Young billed to the registrant, the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by or under common control with the adviser that provides ongoing services to the registrant for each of registrant's last two fiscal years were as follows.

March 31, 2022 - $11,699

March 31, 2021 - $10,588

(h)

The registrant’s audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

ITEM 5 – AUDIT COMMITTEE OF LISTED REGISTRANTS

(a) Not applicable.

(b) Not applicable.

ITEM 6 – SCHEDULE OF INVESTMENTS

Schedule of Investments is included as part of the Report to Shareholders filed under Item 1 of this form.

ITEM 7 – DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Below are copies of the Registrant’s proxy voting policies and procedures, which consist of the proxy voting policies and procedures of the Registrant’s adviser, Principal Global Investors, LLC (“PGI”), and its sub-advisers.

Proxy Voting Policies and Procedures For

Principal Funds, Inc.

Principal Variable ContractsFunds, Inc.

Principal Exchange-Traded Funds

Principal Diversified Select Real Asset Fund (and other Principal interval funds)

(each a “Fund” and together “the Funds”)

(March 9, 2015)

Revised June 11, 2019

It is each Fund's policy to delegate authority to its advisor or sub-advisor, as appropriate, to vote proxy ballots relating to the Fund's portfolio securities in accordance with the adviser's or sub-adviser's voting policies and procedures.

The adviser or sub-adviser must provide, on a quarterly basis:

1.

Written affirmation that all proxies voted during the preceding calendar quarter, other than those specifically identified by the adviser or sub-adviser, were voted in a manner consistent with the adviser's or sub-adviser's voting policies and procedures. In order to monitor the potential effect of conflicts of interest of an adviser or sub-adviser, the adviser or sub-adviser will identify any proxies the adviser or sub-adviser voted in a manner inconsistent with its policies and procedures. The adviser or sub-adviser shall list each vote, explain why the adviser or sub-adviser voted in a manner contrary to its policies and procedures, state whether the adviser or sub-adviser’s vote was consistent with the recommendation to the adviser or sub-adviser of a third-party and, if so, identify the third-party;and

2.

Written notification of any material changes to the adviser's or sub-adviser's proxy voting policies and procedures made during the preceding calendarquarter.

The adviser or sub-adviser must provide, no later than July 31 of each year, the following information regarding each proxy vote cast during the 12-month period ended June 30 for each Fund portfolio or portion of Fund portfolio for which it serves as investment adviser, in a format acceptable to Fundmanagement:

1.

Identification of the issuer of thesecurity;

2.

Exchange ticker symbol of the security;

3.

CUSIP number of the security;

4.

The date of the shareholdermeeting;

5.

A brief description of the subject of thevote;

6.

Whether the proposal was put forward by the issuer or ashareholder;

7.

Whether and how the vote wascast; and

8.

Whether the vote was cast for or against management of theissuer.

PRINCIPAL GLOBAL INVESTORS, LLC

Principal Real Estate Investors, LLC

Proxy Voting and Class Action Monitoring

Introduction

Principal Global Investors¹ (“PGI”) is an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”) pursuant to the Investment Advisers Act of 1940 (the “Advisers Act”).   As a registered investment adviser, PGI has a fiduciary duty to act in the best interests of its clients.  PGI recognizes that this duty requires it to vote client securities, for which it has voting power on the applicable record date, in a timely manner and make voting decisions that are in the best interests of its clients.  This document, Principal Global Investors’ Proxy Voting Policies and Procedures (the “Policy”) is intended to comply with the requirements of the Investment Advisers Act of 1940, the Investment Company Act of 1940 and the Employee Retirement Income Security Act of 1974 applicable to the voting of the proxies of both US and non-US issuers on behalf of PGI’s clients who have delegated such authority and discretion. 

Effective January 1, 2021 Finisterre investment teams adopted the policies and procedures in the Adviser’s compliance manual except for the following proxy policies and procedures.  Finisterre investment teams will continue to follow previously adopted proxy policies and procedures until amended.  Please see attached Appendix to this manual for Finisterre specific proxy policies and procedures.

Relationship between Investment Strategy, ESG and Proxy Voting

PGI has a fiduciary duty to make investment decisions that are in its clients’ best interests by maximizing the value of their shares.  Proxy voting is an important part of this process through which PGI can support strong corporate governance structures, shareholder rights and transparency.  PGI also believes a company’s positive environmental, social and governance (“ESG”) practices may influence the value of the company, leading to long-term shareholder value.  PGI may take these factors into considerations when voting proxies in its effort to seek the best outcome for its clients.  PGI believes that the integration of consideration of ESG practices in PGI’s investment process helps identify sources of risk that could erode the long-term investment results it seeks on behalf of its clients.   From time to time, PGI may work with various ESG-related organizations to engage issuers or advocate for greater levels of disclosure. 

Roles and Responsibilities

Role of the Proxy Voting Committee

PGI’s Proxy Voting Committee (the “Proxy Voting Committee”) shall (i) oversee the voting of proxies and the Proxy Advisory Firm, (ii) where necessary, make determinations as to how to instruct the vote on certain specific proxies, (iii) verify ongoing compliance with the Policy, (iv) review the business practices of the Proxy Advisory Firm and (v) evaluate, maintain, and review the Policy on an annual basis.  The Proxy Voting Committee is comprised of representatives of each investment team and a representative from PGI Risk, Legal, Operations, and Compliance will be available to advise the Proxy Voting Committee but are non-voting members. The Proxy Voting Committee may designate one or more of its members to oversee specific, ongoing compliance with respect to the Policy and may designate personnel to instruct the vote on proxies on behalf the PGI’s clients (collectively, “Authorized Persons”).

The Proxy Voting Committee shall meet at least four times per year, and as necessary to address special situations. 

Role of Portfolio Management

While the Proxy Voting Committee establishes the Guidelines and Procedures, the Proxy Voting Committee does not direct votes for any client except in certain cases where a conflict of interest exists.  Each investment team is responsible for determining how to vote proxies for those securities held in the portfolios their team manages. While investment teams generally vote consistently with the Guidelines, there may be instances where their vote deviates from the Guidelines. In those circumstances, the investment team will work within the Exception Process. In some instances, the same security may be held by more than one investment team. In these cases, PGI may vote differently on the same matter for different accounts as determined by each investment team.

Proxy Voting Guidelines

The Proxy Voting Committee, on an annual basis, or more frequently as needed, will direct each investment team to review draft proxy voting guidelines recommended by the Proxy Advisory Firm (“Draft Guidelines”).  The Proxy Voting Committee will collect the reviews of the Draft Guidelines to determine whether any investment teams have positions on issues that deviate from the Draft Guidelines.  Based on this review, PGI will adopt proxy voting guidelines.  Where an investment team has a position which deviates from the Draft Guidelines, an alternative set of guidelines for that investment team may be created. Collectively, these guidelines will constitute PGI’s current Proxy Voting Guidelines and may change from time to time (the “Guidelines”).  The Proxy Voting Committee has the obligation to determine that, in general, voting proxies pursuant to the Guidelines is in the best interests of clients.  Exhibit A to the Policy sets forth the current Guidelines.

There may be instances where proxy votes will not be in accordance with the Guidelines.  Clients may instruct PGI to utilize a different set of guidelines, request specific deviations, or directly assume responsibility for the voting of proxies.  In addition, PGI may deviate from the Guidelines on an exception basis if the investment team or PGI has determined that it is the best interest of clients in a particular strategy to do so, or where the Guidelines do not direct a particular response and instead list relevant factors.  Any such a deviation will comply with the Exception Process which shall include a written record setting out the rationale for the deviation.   

The subject of the proxy vote may not be covered in the Guidelines.  In situations where the Guidelines do not provide a position, PGI will consider the relevant facts and circumstances of a particular vote and then vote in a manner PGI believes to be in the clients’ bests interests.  In such circumstance, the analysis will be documented in writing and periodically presented to the Proxy Voting Committee.  To the extent that the Guidelines do not cover potential voting issues, PGI may consider the spirit of the Guidelines and instruct the vote on such issues in a manner that PGI believes would be in the best interests of the client.

Use of Proxy Advisory Firms

PGI has retained one or more third-party proxy service provider(s) (the “Proxy Advisory Firm”) to provide recommendations for proxy voting guidelines, information on shareholder meeting dates and proxy materials, translate proxy materials printed in a foreign language, provide research on proxy proposals, operationally process votes in accordance with the Guidelines on behalf of the clients for whom PGI has proxy voting responsibility, and provide reports concerning the proxies voted (“Proxy Voting Services”). Although PGI has retained the Proxy Advisory Firm for Proxy Voting Services, PGI remains responsible for proxy voting decisions. PGI has designed the Policy to oversee and evaluate the Proxy Advisory Firm, including with respect to the matters described below, to support the PGI’s voting in accordance with this Policy. 

Oversight of Proxy Advisory Firms

Prior to the selection of any new Proxy Advisory Firm and annually thereafter or more frequently if deemed necessary by PGI, the Proxy Voting Committee will consider whether the Proxy Advisory Firm: (a) has the capacity and competency to adequately analyze proxy issues and provide the Proxy Voting Services the Proxy Advisory Firm has been engaged to provide and (b) can make its recommendations in an impartial manner, in consideration of the best interests of PGI’s clients, and consistent with the PGI’s voting policies.  Such considerations may include, depending on the Proxy Voting Services provided, the following: (i) periodic sampling of votes pre-populated by the Proxy Advisory Firm’s systems as well as votes cast by the Proxy Advisory Firm to review that the Guidelines adopted by PGI are being followed; (ii) onsite visits to the Proxy Advisory Firm office and/or discussions with the Proxy Advisory Firm to determine whether the Proxy Advisory Firm continues to have the capacity and competency to carry out its proxy obligations to PGI; (iii) a review of those aspects of the Proxy Advisory Firm’s policies, procedures, and methodologies for formulating voting recommendations that PGI consider material to Proxy Voting Services provided to PGI, including factors considered, with a particular focus on those relating to identifying, addressing and disclosing potential conflicts of interest (including potential conflicts related to the provision of Proxy Voting Services, activities other than Proxy Voting Services, and those presented by affiliation such as a controlling shareholder of the Proxy Advisory Firm) and monitoring that materially current, accurate, and complete information is used in creating recommendations and research; (iv) requiring the Proxy Advisory Firm to notify PGI if there is a substantive change in the Proxy Advisory Firm’s policies and procedures or otherwise to business practices, including with respect to conflicts, information gathering and creating voting recommendations and research, and reviewing any such change(s); (v) a review of how and when the Proxy Advisory Firm engages with, and receives and incorporates input from, issuers, the Proxy Advisory Firm’s clients and other third-party information sources; (vi) assessing how the Proxy Advisory Firm considers factors unique to a specific issuer or proposal when evaluating a matter subject to a shareholder vote; (vii) in case of an error made by the Proxy Advisory Firm, discussing the error with the Proxy Advisory Firm and determining whether appropriate corrective and preventive action is being taken; and (viii) assessing whether the Proxy Advisory Firm appropriately updates its methodologies, guidelines, and voting recommendations on an ongoing basis and incorporates input from issuers and Proxy Advisory Firm clients in the update process. In evaluating the Proxy Advisory Firm, PGI may also consider the adequacy and quality of the Proxy Advisory Firm’s staffing, personnel, and/or technology.

Procedures for Voting Proxies

To increase the efficiency of the voting process, PGI utilizes the Proxy Advisory Firm to act as its voting agent for its clients’ holdings.  Issuers initially send proxy information to the clients’ custodians. PGI instructs these custodians to direct proxy related materials to the Proxy Advisory Firm. The Proxy Advisory Firm provides PGI with research related to each resolution.

PGI analyzes relevant proxy materials on behalf of their clients and seek to instruct the vote (or refrain from voting) proxies in accordance with the Guidelines.  A client may direct PGI to vote for such client’s account differently than what would occur in applying the Policy and the Guidelines.  PGI may also agree to follow a client’s individualized proxy voting guidelines or otherwise agree with a client on particular voting considerations.

PGI seeks to vote (or refrain from voting) proxies for its clients in a manner that PGI determines is in the best interests of its clients, which may include both considering both the effect on the value of the client’s investments and ESG factors.  In some cases, PGI may determine that it is in the best interests of clients to refrain from exercising the clients’ proxy voting rights.  PGI may determine that voting is not in the best interests of a client and refrain from voting if the costs, including the opportunity costs, of voting would, in the view of PGI, exceed the expected benefits of voting to the client.

Procedures for Proxy Issues within the Guidelines

Where the Guidelines address the proxy matter being voted on, the Proxy Advisor Firm will generally process all proxy votes in accordance with the Guidelines.  The applicable investment team may provide instructions to vote contrary to the Guidelines in their discretion and with sufficient rationale documented in writing to seek to maximize the value of the client’s investments or is otherwise in the client’s best interest. This rationale will be submitted to PGI Compliance to approve and once approved administered by PGI Operations.   This process will follow the Exception Process. The Proxy Voting Committee will receive and review a quarterly report summarizing all proxy votes for securities for which PGI exercises voting authority. In certain cases, a client may have elected to have PGI administer a custom policy which is unique to the Client. If PGI is also responsible for the administration of such a policy, in general, except for the specific policy differences, the procedures documented here will also be applicable, excluding reporting and disclosure procedures.

Procedures for Proxy Issues Outside the Guidelines

To the extent that the Guidelines do not cover potential voting issues, the Proxy Advisory Firm will seek direction from PGI.  PGI may consider the spirit of the Guidelines and instruct the vote on such issues in a manner that PGI believes would be in the best interests of the client.  Although this not an exception to the Guidelines, this process will also follow the Exception Process. The Proxy Voting Committee will receive and review a quarterly report summarizing all proxy votes for securities for which PGI exercises voting discretion, which shall include instances where issues fall outside the Guidelines.

Securities Lending

Some clients may have entered into securities lending arrangements with agent lenders to generate additional revenue.  If a client participates in such lending, the client will need to inform PGI as part of their contract with PGI if they require PGI to take actions in regard to voting securities that have been lent. If not commemorated in such agreement, PGI will not recall securities and as such, they will not have an obligation to direct the proxy voting of lent securities.

In the case of lending, PGI maintains one share for each company security out on loan by the client. PGI will vote the remaining share in these circumstances. 

In cases where PGI does not receive a solicitation or enough information within a sufficient time (as reasonably determined by PGI) prior to the proxy-voting deadline, PGI or the Proxy Advisory Firm may be unable to vote. 

Regional Variances in Proxy Voting

PGI utilizes the Policy and Guidelines for both US and non-US clients, and there are some significant differences between voting U.S. company proxies and voting non-U.S. company proxies.  For U.S. companies, it is usually relatively easy to vote proxies, as the proxies are typically received automatically and may be voted by mail or electronically.  In most cases, the officers of a U.S. company soliciting a proxy act as proxies for the company’s shareholders.

With respect to non-U.S. companies, we make reasonable efforts to vote most proxies and follow a similar process to those in the U.S. However, in some cases it may be both difficult and costly to vote proxies due to local regulations, customs or other requirements or restrictions, and such circumstances and expected costs may outweigh any anticipated economic benefit of voting.  The major difficulties and costs may include:  (i) appointing a proxy; (ii) obtaining reliable information about the time and location of a meeting; (iii) obtaining relevant information about voting procedures for foreign shareholders; (iv) restrictions on trading securities that are subject to proxy votes (share-blocking periods); (v) arranging for a proxy to vote locally in person; (vi) fees charged by custody banks for providing certain services with regard to voting proxies; and (vii) foregone income from securities lending programs.  In certain instances, it may be determined by PGI that the anticipated economic benefit outweighs the expected cost of voting.  PGI intends to make their determination on whether to vote proxies of non-U.S. companies on a case-by-case basis. In doing so, PGI shall evaluate market requirements and impediments, including the difficulties set forth above,  for voting proxies of companies in each country. PGI periodically reviews voting logistics, including costs and other voting difficulties, on a client by client and country by country basis, in order to determine if there have been any material changes that would affect PGI’s determinations and procedures. 

Conflicts of Interest

PGI recognizes that, from time to time, potential conflicts of interest may exist. In order to avoid any perceived or actual conflict of interest, the procedures set forth below have been established for use when PGI encounters a potential conflict to ensure that PGI’s voting decisions are based on maximizing shareholder value and are not the product of a conflict.

Addressing Conflicts of Interest – Exception Process

Prior to voting contrary to the Guidelines, the relevant investment team must complete and submit a report to PGI Compliance setting out the name of the security, the issue up for vote, a summary of the Guidelines’ recommendation, the vote changes requested and the rational for voting against the Guidelines’ recommendation.  The member of the investment team requesting the exception must attest to compliance with Principal’s Code of Conduct and the has an affirmative obligation to disclose any known personal or business relationship that could affect the voting of the applicable proxy.  PGI Compliance will approve or deny the exception in consultation, if deemed necessary, with the Legal.

If PGI Compliance determines that there is no potential material conflict exists, the Guidelines may be overridden.  If PGI Compliance determines that there exists or may exist a material conflict, it will refer the issue to the Proxy Voting Committee.  The Proxy Voting Committee will consider the facts and circumstances of the pending proxy vote and the potential or actual material conflict and decide by a majority vote as to how to vote the proxy – i.e., whether to permit or deny the exception. 

In considering the proxy vote and potential material conflict of interest, the Proxy Voting Committee may review the following factors:

I.

The percentage of outstanding securities of the issuer held on behalf of clients by PGI;

II.

The nature of the relationship of the issuer with the PGI, its affiliates or its executive officers;

III.

Whether there has been any attempt to directly or indirectly influence the investment team’s decision;

IV.

Whether the direction of the proposed vote would appear to benefit PGI or a related party; and/or

A.

Whether an objective decision to vote in a certain way will still create a strong appearance of a conflict.

In the event that the Proxy Advisor Firm itself has a conflict and thus is unable to provide a recommendation, the investment team may vote in accordance with the recommendation of another independent service provider, if available. If a recommendation from an independent service provider other than the Proxy Advisor Firm is not available, the investment team will follow the Exception Process. PGI Compliance will review the form and if it determines that there is no potential material conflict mandating a voting recommendation from the Proxy Voting Committee, the investment team may instruct the Proxy Advisory Firm to vote the proxy issue as it determines is in the best interest of clients. If PGI Compliance determines that there exists or may exist a material conflict, it will refer the issue to the Proxy Voting Committee for consideration as outlined above.

Availability of Proxy Voting Information and Recordkeeping

Disclosure

On a quarterly basis, PGI publicly discloses on our website https://www.principalglobal.com/eu/about-us/responsible-investing  a voting report setting forth the manner in which votes were cast, including details related to (i) votes against management, and (ii) abstentions.   Form more information, Clients may contact PGI for more information related to how PGI has voted with respect to securities held in the Client’s account.  On request, PGI will provide clients with a summary of PGI’s proxy voting guidelines, process and policies and will inform the clients how they can obtain a copy of the complete Proxy Voting Policies and Procedures upon request.  PGI will also include such information described in the preceding two sentences in Part 2A of its Form ADV. 

Recordkeeping

PGI will  keep records of the following items: (i) the Guidelines, (ii) the Proxy Voting Policies and Procedures; (iii) proxy statements received regarding client securities (unless such statements are available on the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system); (iv) records of votes they cast on behalf of clients, which may be maintained by a Proxy Advisory Firm if it undertakes to provide copies of those records promptly upon request; (v) records of written client requests for proxy voting information and PGI’s responses (whether a client’s request was oral or in writing); (vi) any documents prepared by PGI that were material to making a decision how to vote, or that memorialized the basis for the decision; (vii) a record of any testing conducted on any Proxy Advisory Firm’s votes; (viii) materials collected and reviewed by PGI as part of its due diligence of the Proxy Advisory Firm; (ix) a copy of each version of the Proxy Advisory Firm’s policies and procedures provided to PGI; and (x) the minutes of the Proxy Voting Committee meetings.  All of the records referenced above will be kept in an easily accessible place for at least the length of time required by local regulation and custom, and, if such local regulation requires that records are kept for less than six years from the end of the fiscal year during which the last entry was made on such record, we will follow the US rule of six years. If the local regulation requires that records are kept for more than six years, we will comply with the local regulation. We maintain the vast majority of these records electronically.

(1)           These policies and procedures apply to Principal Global Investors, LLC, Principal Real Estate Investors, LLC, Principal Global Investors (Hong Kong) Limited and any affiliates which have entered into participating affiliate agreements with the aforementioned managers. 

Appendix: Finisterre Proxy Voting Policy and Procedures

Statement of Policy

Proxy voting is an important right of investors and reasonable care and diligence must be undertaken to ensure that such rights are properly and timely exercised. The Firm generally retains proxy-voting authority with respect to securities purchased for its clients. Under such circumstances, the Firm votes proxies in the best interest of its clients and in accordance with these policies and procedures.

Use of Third-Party Proxy Voting Service

The Firm has entered into an agreement with Broadridge Investor Communication Solutions, Inc. (referred to as “Broadridge” and the “Proxy Voting Service”) acting with Glass Lewis & Co, to enable it to fulfill its proxy voting obligations.

Broadridge executes, monitors and records the proxies according to the instructions of the Firm. The Firm relies on the recommendations of Glass Lewis & Co, LLC to provide recommendations as to how any proxy should be voted in the best interests of the Clients. These recommendations are integrated into the voting platform set up by the Proxy Voting Service, and the Firm has instructed the Proxy Voting Service to execute all proxies in accordance with such recommendation unless instructed otherwise by the Firm.

The SEC has expressed its view that although the voting of proxies remains the duty of a registered adviser, an adviser may contract with service providers to perform certain functions with respect to proxy voting so long as the adviser is comfortable that the proxy voting service is independent from the issuer companies on which it completes its proxy research.  In assessing whether a proxy voting service is independent (as defined by the SEC), the SEC counsels investment advisers that they should not follow the recommendations of an independent proxy voting service without first determining, among other things, that the proxy voting service (a) has the capacity and competence to analyze proxy issues and (b) is in fact independent and can make recommendations in an impartial manner in the best interests of the adviser's clients.

At a minimum annually, or more frequently as deemed necessary, Compliance will ensure that a review of the independence and impartiality of the Proxy Voting Service is carried out, including obtaining certification or other information from the Proxy Voting Service to enable the Firm to make such an assessment. Compliance will also monitor any new SEC interpretations regarding the voting of proxies and the uses of third-party proxy voting services and revise the Firm’s policies and procedures as necessary.

Proxies relating to securities held in client accounts will be sent directly to the Proxy Voting Service. If a proxy is received by anyone in the Firm, they must immediately inform the Compliance and work with Compliance to ensure that it is promptly forwarded to the Proxy Voting Service. In the event that the Proxy Voting Service is unable to complete/provide its research regarding a security on a timely basis or the Firm has made a determination that it is in the best interests of the Firm’s clients for the Firm to vote the proxy, the Firm’s general proxy-voting procedures are required to be followed, as follows.

Compliance will require that:

1.    the recipient of the proxy will forward a copy to Compliance, who will keep a copy of each proxy received;

2.    if the recipient is not the Portfolio Manager responsible for voting the proxy on behalf of the Firm, s/he will forward a copy to such Portfolio manager;

3.    the Portfolio Manager will determine how to vote the proxy promptly in order to allow enough time for the completed proxy to be returned to the issuer prior to the vote taking place; and provide evidence of such to Compliance;

4.    Absent material conflicts (see Section V), the Portfolio Manager will determine whether the Firm will follow the Proxy Voting Service’s recommendation or vote the proxy directly. The Portfolio Manager will send his/her decision on how the Firm should vote a proxy to the Proxy Voting Service, in a timely and appropriate manner. It is desirable to have the Proxy Voting Service complete the actual voting so there exists one central source for the documentation of the Firm’s proxy voting records.

Voting Guidelines

To the extent that the Firm is voting a proxy itself and not utilizing the Proxy Voting Service, the Firm will consider the proxy on a case by case basis and require that the relevant investment professional vote the proxy in a manner consistent with the Firm’s duty. Investment professionals of the Firm each have the duty to vote proxies in a way that, in their best judgment, is in the best interest of the Firm’s clients.

Disclosure

A.     The Firm will disclose in its Form ADV Part 2 that clients may contact the Chief Compliance Officer via e-mail or telephone in order to obtain information on how the Firm voted such client’s proxies, and to request a copy of these policies and procedures. If a client requests this information, the Chief Compliance Officer will prepare a written response to the client that lists, with respect to each voted proxy that the client has inquired about, (1) the name of the issuer; (2) the proposal voted upon and (3) how the Firm voted the client’s proxy.

B.     A concise summary of these Proxy Voting Policies and Procedures will be included in the Firm’s Form ADV Part 2 and will be updated whenever these policies and procedures are updated. Compliance will arrange for a copy of this summary to be sent to all existing clients.

Potential Conflicts of Interest

B.

In the event that the Firm is directly voting a proxy, Compliance will examine conflicts that exist between the interests of the Firm and its clients. This examination will include a review of the relationship of the Firm, its personnel and its affiliates with the issuer of each security and any of the issuer’s affiliates to determine if the issuer is a client of the Firm or an affiliate of the Firm or has some other relationship with the Firm, its personnel or a client of the Firm.

C.

If, as a result of Compliance’s examination, a determination is made that a material conflict of interest exists, the Firm will determine whether voting in accordance with the voting guidelines and factors described above is in the best interests of the client. If the proxy involves a matter covered by the voting guidelines and factors described above, the Firm will generally vote the proxy as specified above. Alternatively, the Firm may vote the proxy in accordance with the recommendation of the Proxy Voting Service.

The Firm may disclose the conflict to the affected clients and, except in the case of clients that are subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), give the clients the opportunity to vote their proxies themselves In the case of ERISA clients, if the Investment Management Agreement reserves to the ERISA client the authority to vote proxies when the Firm determines it has a material conflict that affects its best judgment as an ERISA fiduciary, the Firm will give the ERISA client the opportunity to vote the proxies themselves.

Absent the client reserving voting rights, the Firm will either vote the proxies in accordance with the policies outlined in Section III “Voting Guidelines” above or vote the proxies in accordance with the recommendation of the Proxy Voting Service.

Proxy Recordkeeping

Compliance will maintain files relating to the Firm’s proxy voting procedures in an easily accessible place. (Under the services contract between the Firm and its Proxy Voting Service, the Proxy Voting Service will maintain the Firm’s proxy-voting records). Records will be maintained and preserved for five years from the end of the fiscal year during which the last entry was made on a record, with records for the most recent two years kept in the offices of the Firm. Records of the following will be included in the files:

V.

Copies of these proxy voting policies and procedures, and any amendments thereto;

A.

A copy of each proxy statement that the Firm receives regarding client securities (the Firm may rely on third parties or EDGAR);

B.

A record of each vote that the Firm casts;

C.

A copy of any document the Firm created that was material to making a decision how to vote proxies, or that memorializes that decision. (For votes that are inconsistent with the Firm’s general proxy voting polices, the reason/rationale for such an inconsistent vote is required to be briefly documented and maintained); and

D.

A copy of each written client request for information on how the Firm voted such client’s proxies, and a copy of any written response to any (written or oral) client request for information on how the Firm voted its proxies.

January 1, 2021

ClearBridge

Investments

Proxy Voting Policy

March 2021

ClearBridge Investments Limited (CIL)

ClearBridge RARE Infrastructure International Pty Limited (CBI RIIPL)

ClearBridge RARE Infrastructure (North America) Pty Limited (CBI RINA)

(the above entities are referred to as “ClearBridge” for the purposes of this policy.

ClearBridge and ClearBridge Investments, LLC. are collectively referred to as

“ClearBridge Investments”.)

Document Owner: Head of Legal, Risk & Compliance

This document is confidential and is only intended for the purposes of the above entities. This document may only be provided to third parties with the express prior written approval of the Head of Legal, Risk & Compliance. No recipient is authorised to pass this document or its contents on to any other person whatsoever or reproduce it by any means. All intellectual property contained in this document remains the property of the above entities and any rights in relation to this intellectual property are not intended to be diluted by the distribution of this document.

CLEARBRIDGE INVESTMENTS

PROXY VOTING POLICIES AND PROCEDURES

AMENDED AS OF MARCH 2021

II.

Types of Accounts for Which ClearBridge Votes Proxies

III.

General Guidelines

IV.

How ClearBridge Votes

V.

Conflicts of Interest

B.

Procedures for Identifying Conflicts of Interest

C.

Procedures for Assessing Materiality of Conflicts of Interest and for Addressing Material Conflicts of Interest

D.

Third Party Proxy Voting Firm – Conflicts of Interest

VI.

Voting Policy

B.

Election of Directors

C.

Proxy Contests

D.

Auditors

E.

Proxy Contest Defenses

E.

Tender Offer Defenses

F.

Miscellaneous Governance Provisions

G.

Capital Structure

H.

Executive and Director Compensation

I.

State/Country of Incorporation

J.

Mergers and Corporate Restructuring

K.

Social and Environmental Issues

L.

Miscellaneous

VI.

Other Considerations

A.

Share Blocking

B.

Securities on Loan

VII.

Disclosure of Proxy Voting

VIII.

Recordkeeping and Oversight

CLEARBRIDGE INVESTMENTS

Proxy Voting Policies and Procedures

I.

TYPES OF ACCOUNTS FOR WHICH CLEARBRIDGE VOTES PROXIES

ClearBridge votes proxies for each client for which it has investment discretion unless the investment management agreement provides that the client or other authorized party (e.g., a trustee or named fiduciary of a plan) is responsible for voting proxies.

II.

GENERAL GUIDELINES

In voting proxies, we are guided by general fiduciary principles. Our goal is to act prudently, solely in the best interest of the beneficial owners of the accounts we manage. We attempt to provide for the consideration of all factors that could affect the value of the investment and will vote proxies in the manner that we believe will be consistent with efforts to maximize shareholder values.

III.

HOW CLEARBRIDGE VOTES

Section V of these policies and procedures sets forth certain stated positions. In the case of a proxy issue for which there is a stated position, we generally vote in accordance with the stated position. In the case of a proxy issue for which there is a list of factors set forth in Section V that we consider in voting on such issue, we consider those factors and vote on a case-by-case basis in accordance with the general principles set forth above. In the case of a proxy issue for which there is no stated position or list of factors that we consider in voting on such issue, we vote on a case-by-case basis in accordance with the general principles set forth above. We may utilize an external service provider to provide us with information and/or a recommendation with regard to proxy votes but we are not required to follow any such recommendations.  The   use of an external service provider does not relieve us of our responsibility for the proxy vote.

For routine matters, we usually vote according to our policy or the external service provider’s recommendation, although we are not obligated to do so and each individual portfolio management team may vote contrary to our policy or the recommendation of the external service provider. If a matter is non-routine, e.g., management’s recommendation is different than that of the external service provider and ClearBridge is a significant holder or it is a significant holding for ClearBridge, the issues will be highlighted to the appropriate investment teams. Different investment teams may vote differently on the same issue, depending upon their assessment of clients’ best interests.

ClearBridge’s policies are reviewed annually and its proxy voting process is overseen and coordinated by its Proxy Committee.

IV.

CONFLICTS OF INTEREST

In furtherance of ClearBridge’s goal to vote proxies in the best interests of clients, ClearBridge follows procedures designed to identify and address material conflicts that may arise between ClearBridge’s interests and those of its clients before voting proxies on behalf of such clients.

A.

Procedures for Identifying Conflicts of Interest

ClearBridge relies on the following to seek to identify conflicts of interest with respect to proxy voting:

1.

ClearBridge’s employees are periodically reminded of their obligation (i) to be aware of the potential for conflicts of interest on the part of ClearBridge with respect to voting proxies on behalf of client accounts both as a result of their personal relationships or personal or business relationships relating to another Franklin Resources, Inc. ("Franklin") business unit, and (ii) to bring conflicts of interest of which they become aware to the attention of ClearBridge’s General Counsel/Chief Compliance Officer.

2.

ClearBridge’s finance area maintains and provides to ClearBridge Compliance and proxy voting personnel an up- to-date list of all client relationships that have historically accounted for or are projected to account for greater than 1% of ClearBridge’s net revenues.

3.

As a general matter, ClearBridge takes the position that relationships between a non- ClearBridge Franklin unit and an issuer (e.g., investment management relationship between an issuer and a non- ClearBridge Franklin affiliate) do not present a conflict of interest for ClearBridge in voting proxies with respect to such issuer because ClearBridge operates as an independent business unit from other Franklin business units and because of the existence of informational barriers between ClearBridge and certain other Franklin business units. As noted above, ClearBridge employees are under an obligation to bring such conflicts of interest, including conflicts of interest which may arise because of an attempt by another Franklin business unit or non- ClearBridge Franklin officer or employee to influence proxy voting by ClearBridge to the attention of ClearBridge Compliance.

4.

A list of issuers with respect to which ClearBridge has a potential conflict of interest in voting proxies on behalf of client accounts will be maintained by ClearBridge proxy voting personnel. ClearBridge will not vote proxies relating to such issuers until it has been determined that the conflict of interest is not material or a method for resolving the conflict of interest has been agreed upon and implemented, as described in Section IV below.

B.

Procedures for Assessing Materiality of Conflicts of Interest and for Addressing Material Conflicts of Interest

1.

ClearBridge maintains a Proxy Committee which, among other things, reviews and addresses conflicts of interest brought to its attention. The Proxy Committee is comprised of such ClearBridge personnel (and others, at ClearBridge’s request), as are designated from time to time. The current members of the Proxy Committee are set forth in the Proxy Committee’s Terms of Reference.

2.

All conflicts of interest identified pursuant to the procedures outlined in Section IV.A. must be brought to the attention of the Proxy Committee for resolution. A proxy issue that will be voted in accordance with a stated ClearBridge position on such issue or in accordance with the recommendation of an independent third party generally is not brought to the attention of the Proxy Committee for a conflict of interest review because ClearBridge’s position is that any conflict of interest issues are resolved by voting in accordance with a pre-determined policy or in accordance with the recommendation of an independent third party.

3.

The Proxy Committee will determine whether a conflict of interest is material. A conflict of interest will be considered material to the extent that it is determined that such conflict is likely to influence, or appear to influence, ClearBridge’s decision-making in voting the proxy. All materiality determinations will be based on an assessment of the particular facts and circumstances. A written record of all materiality determinations made by the Proxy Committee will be maintained.

4.

If it is determined by the Proxy Committee that a conflict of interest is not material, ClearBridge may vote proxies notwithstanding the existence of the conflict.

5.

If it is determined by the Proxy Committee that a conflict of interest is material, the Proxy Committee will determine an appropriate method to resolve such conflict of interest before the proxy affected by the conflict of interest is voted. Such determination shall be based on the particular facts and circumstances, including the importance of the proxy issue, the nature of the conflict of interest, etc. Such methods may include:

•

disclosing the conflict to clients and obtaining their consent before voting;

•

suggesting to clients that they engage another party to vote the proxy on their behalf;

•

in the case of a conflict of interest resulting from a particular employee’s personal relationships, removing such employee from the decision-making process with respect to such proxy vote; or

•

such other method as is deemed appropriate given the particular facts and circumstances, including the importance of the proxy issue, the nature of the conflict of interest, etc.

[2]

A written record of the method used to resolve a material conflict of interest shall be maintained.

C.

Third Party Proxy Voting Firm - Conflicts of Interest

With respect to a third-party proxy voting firm described herein, the Proxy Committee will periodically review and assess such firm’s policies, procedures and practices with respect to the disclosure and handling of conflicts of interest.

V.

VOTING POLICY

These are policy guidelines that can always be superseded, subject to the duty to act solely in the best interest of the beneficial owners of accounts, by the investment management professionals responsible for the account holding the shares being voted. There may be occasions when different investment teams vote differently on the same issue. In addition, in the case of Taft-Hartley clients, ClearBridge will comply with a client direction to vote proxies in accordance with Institutional Shareholder Services’ (ISS) PVS Proxy Voting Guidelines, which ISS represents to be fully consistent with AFL-CIO guidelines.

A.

Election of Directors

1.

Voting on Director Nominees in Uncontested Elections.

a.

We withhold our vote from a director nominee who:

•

attended less than 75 percent of the company’s board and committee meetings without a valid excuse (illness, service to the nation/local government, work on behalf of the company);

•

received more than 50 percent withheld votes of the shares cast at the previous board election, and the company has failed to address the issue as to why;

•

is a member of the company’s audit committee, when excessive non-audit fees were paid to the auditor, or there are chronic control issues and an absence of established effective control mechanisms;

•

is a member of the company’s compensation committee if the compensation committee ignore a say on pay proposal that a majority of shareholders opposed;

•

is a member of the company’s nominating committee and there are no women on the board (or currently proposed for election to the board)

b.

We vote for all other director nominees.

2.

Chairman and CEO is the Same Person.

We vote on a case-by-case basis on shareholder proposals that would require the positions of the Chairman and CEO to be held by different persons. We would generally vote FOR such a proposal unless there are compelling reasons to vote against the proposal, including:

•

Designation of a lead director

•

Majority of independent directors (supermajority)

•

All independent key committees

•

Size of the company (based on market capitalization)

•

Established governance guidelines

•

Company performance

3.

Majority of Independent Directors

a.

We vote for shareholder proposals that request that the board be comprised of a majority of independent directors. Generally that would require that the director have no connection to the company other than the board seat. In determining whether an independent director is truly independent (e.g. when voting on a slate of director candidates), we consider certain factors including, but not necessarily limited to, the following: whether the director or his/her company provided professional services to the company or its affiliates either currently or in the past year; whether the director has any transactional relationship with the company; whether the director is a significant customer or supplier of the company; whether the director is employed by a foundation or university that received significant grants or endowments from the company or its affiliates; and whether there are interlocking directorships.

b.

We vote for shareholder proposals that request that the board audit, compensation and/or nominating committees include independent directors exclusively.

4.

Stock Ownership Requirements

We vote against shareholder proposals requiring directors to own a minimum amount of company stock in order to qualify as a director, or to remain on the board.

5.

Term of Office

We vote against shareholder proposals to limit the tenure of independent directors.

6.

Director and Officer Indemnification and Liability Protection

a.

Subject to subparagraphs 2, 3, and 4 below, we vote for proposals concerning director and officer indemnification and liability protection.

b.

We vote for proposals to limit and against proposals to eliminate entirely director and officer liability for monetary damages for violating the duty of care.

c.

We vote against indemnification proposals that would expand coverage beyond just legal expenses to acts, such as negligence, that are more serious violations of fiduciary obligations than mere carelessness.

d.

We vote for only those proposals that provide such expanded coverage noted in subparagraph 3 above in cases when a director's or officer's legal defense was unsuccessful if: (1) the director was found to have acted in good faith and in a manner that he reasonably believed was in the best interests of the company, and (2) if only the director's legal expenses would be covered.

7.

Director Qualifications

a.

We vote case-by-case on proposals that establish or amend director qualifications. Considerations include how reasonable the criteria are and to what degree they may preclude dissident nominees from joining the board.

b.

We vote against shareholder proposals requiring two candidates per board seat.

B.

Proxy Contests

1.

Voting for Director Nominees in Contested Elections

We vote on a case-by-case basis in contested elections of directors. Considerations include: chronology of events leading up to the proxy contest; qualifications of director nominees (incumbents and dissidents); for incumbents, whether the board is comprised of a majority of outside directors; whether key committees (i.e.: nominating, audit, compensation) comprise solely of independent outsiders; discussion with the respective portfolio manager(s).

2.

Reimburse Proxy Solicitation Expenses

We vote on a case-by-case basis on proposals to provide full reimbursement for dissidents waging a proxy contest. Considerations include: identity of persons who will pay solicitation expenses; cost of solicitation; percentage that will be paid to proxy solicitation firms.

C.

Auditors

1.

Ratifying Auditors

We vote for proposals to ratify auditors, unless an auditor has a financial interest in or association with the company, and is therefore not independent; or there is reason to believe that the independent auditor has rendered an opinion that is neither accurate nor indicative of the company's financial position or there is reason to believe the independent auditor has not followed the highest level of ethical conduct. Specifically, we will vote to ratify auditors if the auditors only provide the company audit services and such other audit-related and non-audit services the provision of which will not cause such auditors to lose their independence under applicable laws, rules and regulations.

2.

Financial Statements and Director and Auditor Reports

We generally vote for management proposals seeking approval of financial accounts and reports and the discharge of management and supervisory board members, unless there is concern about the past actions of the company’s auditors or directors.

3.

Remuneration of Auditors

We vote for proposals to authorize the board or an audit committee of the board to determine the remuneration of auditors, unless there is evidence of excessive compensation relative to the size and nature of the company.

4.

Indemnification of Auditors

We vote against proposals to indemnify auditors.

D.

Proxy Contest Defenses

1.

Board Structure: Staggered vs. Annual Elections

a.

We vote against proposals to classify the board.

b.

We vote for proposals to repeal classified boards and to elect all directors annually.

2.

Shareholder Ability to Remove Directors

a.

We vote against proposals that provide that directors may be removed only for cause.

b.

We vote for proposals to restore shareholder ability to remove directors with or without cause.

c.

We vote against proposals that provide that only continuing directors may elect replacements to fill board vacancies.

d.

We vote for proposals that permit shareholders to elect directors to fill board vacancies.

3.

Cumulative Voting

a.

If plurality voting is in place for uncontested director elections, we vote for proposals to permit or restore cumulative voting.

b.

If majority voting is in place for uncontested director elections, we vote against cumulative voting.

c.

If plurality voting is in place for uncontested director elections, and proposals to adopt both cumulative voting and majority voting are on the same slate, we vote for majority voting and against cumulative voting.

4.

Majority Voting

We vote for non-binding and/or binding resolutions requesting that the board amend a company’s by-laws to stipulate that directors need to be elected with an affirmative majority of the votes cast, provided that it does not conflict with the state law where the company is incorporated. In addition, all resolutions need to provide for a carve-out for a plurality vote standard when there are more nominees than board seats (i.e. contested election). In addition, ClearBridge strongly encourages companies to adopt a post-election director resignation policy setting guidelines for the company to follow to promptly address situations involving holdover directors.

5.

Shareholder Ability to Call Special Meetings

a.

We vote against proposals to restrict or prohibit shareholder ability to call special meetings.

b.

We vote for proposals that provide shareholders with the ability to call special meetings, taking into account a minimum ownership threshold of 10 percent (and investor ownership structure, depending on bylaws).

6.

Shareholder Ability to Act by Written Consent

a.

We vote against proposals to restrict or prohibit shareholder ability to take action by written consent.

b.

We vote for proposals to allow or make easier shareholder action by written consent.

7.

Shareholder Ability to Alter the Size of the Board

a.

We vote for proposals that seek to fix the size of the board.

b.

We vote against proposals that give management the ability to alter the size of the board without shareholder approval.

8.

Advance Notice Proposals

We vote on advance notice proposals on a case-by-case basis, giving support to those proposals which allow shareholders to submit proposals as close to the meeting date as reasonably possible and within the broadest window possible.

9.

Amendment of By-Laws

a.

We vote against proposals giving the board exclusive authority to amend the by-laws.

b.

We vote for proposals giving the board the ability to amend the by-laws in addition to shareholders.

10.

Article Amendments (not otherwise covered by ClearBridge Proxy Voting Policies and Procedures).

We review on a case-by-case basis all proposals seeking amendments to the articles of association.

We vote for article amendments if:

•

shareholder rights are protected;

•

there is negligible or positive impact on shareholder value;

•

management provides adequate reasons for the amendments; and

•

the company is required to do so by law (if applicable).

E.

Tender Offer Defenses

1.

Poison Pills

a.

We vote for shareholder proposals that ask a company to submit its poison pill for shareholder ratification.

b.

We vote on a case-by-case basis on shareholder proposals to redeem a company's poison pill. Considerations include: when the plan was originally adopted; financial condition of the company; terms of the poison pill.

c.

We vote on a case-by-case basis on management proposals to ratify a poison pill. Considerations include: sunset provision - poison pill is submitted to shareholders for ratification or rejection every 2 to 3 years; shareholder redemption feature -10% of the shares may call a special meeting or seek a written consent to vote on rescinding the rights plan.

2.

Fair Price Provisions

a.

We vote for fair price proposals, as long as the shareholder vote requirement embedded in the provision is no more than a majority of disinterested shares.

b.

We vote for shareholder proposals to lower the shareholder vote requirement in existing fair price provisions.

3.

Greenmail

a.

We vote for proposals to adopt anti-greenmail charter or bylaw amendments or otherwise restrict a company's ability to make greenmail payments.

b.

We vote on a case-by-case basis on anti-greenmail proposals when they are bundled with other charter or bylaw amendments.

4.

Unequal Voting Rights

a.

We vote against dual class exchange offers.

b.

We vote against dual class re-capitalization.

5.

Supermajority Shareholder Vote Requirement to Amend the Charter or Bylaws

a.

We vote against management proposals to require a supermajority shareholder vote to approve charter and bylaw amendments.

b.

We vote for shareholder proposals to lower supermajority shareholder vote requirements for charter and bylaw amendments.

6.

Supermajority Shareholder Vote Requirement to Approve Mergers

a.

We vote against management proposals to require a supermajority shareholder vote to approve mergers and other significant business combinations.

b.

We vote for shareholder proposals to lower supermajority shareholder vote requirements for mergers and other significant business combinations.

7.

White Knight/Squire Placements

We vote for shareholder proposals to require approval of blank check preferred stock issues.

F.

Miscellaneous Governance Provisions

1.

Confidential Voting

a.

We vote for shareholder proposals that request corporations to adopt confidential voting, use independent tabulators and use independent inspectors of election as long as the proposals include clauses for proxy contests as follows:  in the case of a contested election, management is permitted to request that the dissident group honor its confidential voting policy. If the dissidents agree, the policy remains in place. If the dissidents do not agree, the confidential voting policy is waived.

b.

We vote for management proposals to adopt confidential voting subject to the proviso for contested elections set forth in sub-paragraph A.1. above.

2.

Equal Access

We vote for shareholder proposals that would allow significant company shareholders equal access to management's proxy material in order to evaluate and propose voting recommendations on proxy proposals and director nominees, and in order to nominate their own candidates to the board.

3.

Bundled Proposals

We vote on a case-by-case basis on bundled or "conditioned" proxy proposals. In the case of items that are conditioned upon each other, we examine the benefits and costs of the packaged items. In instances when the joint effect of the conditioned items is not in shareholders' best interests and therefore not in the best interests of the beneficial owners of accounts, we vote against the proposals. If the combined effect is positive, we support such proposals.

4.

Shareholder Advisory Committees

We vote on a case-by-case basis on proposals to establish a shareholder advisory committee. Considerations include: rationale and cost to the firm to form such a committee. We generally vote against such proposals if the board and key nominating committees are comprised solely of independent/outside directors.

5.

Other Business

We vote for proposals that seek to bring forth other business matters.

6.

Adjourn Meeting

We vote on a case-by-case basis on proposals that seek to adjourn a shareholder meeting in order to solicit additional votes.

7.

Lack of Information

We vote against proposals if a company fails to provide shareholders with adequate information upon which to base their voting decision.

G.

Capital Structure

1.

Common Stock Authorization

a.

We vote on a case-by-case basis on proposals to increase the number of shares of common stock authorized for issue, except as described in paragraph 2 below.

b.

Subject to paragraph 3, below we vote for the approval requesting increases in authorized shares if the company meets certain criteria:

•

Company has already issued a certain percentage (i.e. greater than 50%) of the company's allotment.

•

The proposed increase is reasonable (i.e. less than 150% of current inventory) based on an analysis of the company's historical stock management or future growth outlook of the company.

c.

We vote on a case-by-case basis, based on the input of affected portfolio managers, if holding is greater than 1% of an account.

2.

Stock Distributions: Splits and Dividends

We vote on a case-by-case basis on management proposals to increase common share authorization for a stock split, provided that the split does not result in an increase of authorized but unissued shares of more than 100% after giving effect to the shares needed for the split.

3.

Reverse Stock Splits

We vote for management proposals to implement a reverse stock split, provided that the reverse split does not result in an increase of authorized but unissued shares of more than 100% after giving effect to the shares needed for the reverse split.

4.

Blank Check Preferred Stock

a.

We vote against proposals to create, authorize or increase the number of shares with regard to blank check preferred stock with unspecified voting, conversion, dividend distribution and other rights.

b.

We vote for proposals to create “declawed” blank check preferred stock (stock that cannot be used as a takeover defense).

c.

We vote for proposals to authorize preferred stock in cases where the company specifies the voting, dividend, conversion, and other rights of such stock and the terms of the preferred stock appear reasonable.

d.

We vote for proposals requiring a shareholder vote for blank check preferred stock issues.

5.

Adjust Par Value of Common Stock

We vote for management proposals to reduce the par value of common stock.

6.

Preemptive Rights

a.

We vote on a case-by-case basis for shareholder proposals seeking to establish them and consider the following factors:

•

Size of the Company.

•

Characteristics of the size of the holding (holder owning more than 1% of the outstanding shares).

•

Percentage of the rights offering (rule of thumb less than 5%).

b.

We vote on a case-by-case basis for shareholder proposals seeking the elimination of pre-emptive rights.

7.

Debt Restructuring

We vote on a case-by-case basis for proposals to increase common and/or preferred shares and to issue shares as part of a debt-restructuring plan. Generally, we approve proposals that facilitate debt restructuring.

8.

Share Repurchase Programs

We vote for management proposals to institute open-market share repurchase plans in which all shareholders may participate on equal terms.

9.

Dual-Class Stock

We vote for proposals to create a new class of nonvoting or sub voting common stock if:

•

It is intended for financing purposes with minimal or no dilution to current shareholders

•

It is not designed to preserve the voting power of an insider or significant shareholder

10.

Issue Stock for Use with Rights Plan

We vote against proposals that increase authorized common stock for the explicit purpose of implementing a shareholder rights plan (poison pill).

11.

Debt Issuance Requests

When evaluating a debt issuance request, the issuing company’s present financial situation is examined. The main factor for analysis is the company’s current debt-to-equity ratio, or gearing level. A high gearing level may incline markets and financial analysts to downgrade the company’s bond rating, increasing its investment risk factor in the process. A gearing level up to 100 percent is considered acceptable.

We vote for debt issuances for companies when the gearing level is between zero and 100 percent.

We view on a case-by-case basis proposals where the issuance of debt will result in the gearing level being greater than 100 percent. Any proposed debt issuance is compared to industry and market standards.

12.

Financing Plans

We generally vote for the adopting of financing plans if we believe they are in the best economic interests of shareholders.

H.

Executive and Director Compensation

In general, we vote for executive and director compensation plans, with the view that viable compensation programs reward the creation of stockholder wealth by having high payout sensitivity to increases in shareholder value. Certain factors, however, such as repricing underwater stock options without shareholder approval, would cause us to vote against a plan. Additionally, in some cases we would vote against a plan deemed unnecessary.

1.

OBRA-Related Compensation Proposals

a.

Amendments that Place a Cap on Annual Grant or Amend Administrative Features

We vote for plans that simply amend shareholder-approved plans to include administrative features or place a cap on the annual grants any one participant may receive to comply with the provisions of Section 162(m) of the Internal Revenue Code.

b.

Amendments to Added Performance-Based Goals

We vote for amendments to add performance goals to existing compensation plans to comply with the provisions of Section 162(m) of the Internal Revenue Code.

c.

Amendments to Increase Shares and Retain Tax Deductions Under OBRA

We vote for amendments to existing plans to increase shares reserved and to qualify the plan for favorable tax treatment under the provisions of Section 162(m) the Internal Revenue Code.

d.

Approval of Cash or Cash-and-Stock Bonus Plans

We vote for cash or cash-and-stock bonus plans to exempt the compensation from taxes under the provisions of Section 162(m) of the Internal Revenue Code.

2.

Expensing of Options

We vote for proposals to expense stock options on financial statements.

3.

Shareholder Proposals to Limit Executive and Director Pay

a.

We vote on a case-by-case basis on all shareholder proposals that seek additional disclosure of executive and director pay information. Considerations include: cost and form of disclosure. We vote for such proposals if additional disclosure is relevant to shareholder’s needs and would not put the company at a competitive disadvantage relative to its industry.

b.

We vote on a case-by-case basis on all other shareholder proposals that seek to limit executive and director pay.

4.

Reports to Assess the Feasibility of Including Sustainability as a Performance Metric

We vote in favor of non-binding proposals for reports on the feasibility of including sustainability as a performance metric for senior executive compensation.

We have a policy of voting to reasonably limit the level of options and other equity- based compensation arrangements available to management to reasonably limit shareholder dilution and management compensation. For options and equity-based compensation arrangements, we vote FOR proposals or amendments that would result in the available awards being less than 10% of fully diluted outstanding shares (i.e. if the combined total of shares, common share equivalents and options available to be awarded under all current and proposed compensation plans is less than 10% of fully diluted shares). In the event the available awards exceed the 10% threshold, we would also consider the % relative to the common practice of its specific industry (e.g. technology firms). Other considerations would include, without limitation, the following:

•

Compensation committee comprised of independent outside directors

•

Maximum award limits

•

Repricing without shareholder approval prohibited

•

3-year average burn rate for company

•

Plan administrator has authority to accelerate the vesting of awards

•

Shares under the plan subject to performance criteria

5.

Golden Parachutes

a.

We vote for shareholder proposals to have golden parachutes submitted for shareholder ratification.

b.

We vote on a case-by-case basis on all proposals to ratify or cancel golden parachutes. Considerations include: the amount should not exceed 3 times average base salary plus guaranteed benefits; golden parachute should be less attractive than an ongoing employment opportunity with the firm.

6.

Golden Coffins

a.

We vote for shareholder proposals that request a company not to make any death benefit payments to senior executives’ estates or beneficiaries, or pay premiums in respect to any life insurance policy covering a senior executive’s life (“golden coffin”). We carve out benefits provided under a plan, policy or arrangement applicable to a broader group of employees, such as offering group universal life insurance.

b.

We vote for shareholder proposals that request shareholder approval of survivor benefits for future agreements that, following the death of a senior executive, would obligate the company to make payments or awards not earned.

7.

Anti-Tax Gross-up Policy

a.

We vote for proposals that ask a company to adopt a policy whereby it will not make, or promise to make, any tax gross-up payment to its senior executives, except for tax gross-ups provided pursuant to a plan, policy, or arrangement applicable to management employees of the company generally, such as relocation or expatriate tax equalization policy; we also vote for proposals that ask management to put gross-up payments to a shareholder vote.

b.

We vote against proposals where a company will make, or promise  to make, any  tax gross-up payment to its senior executives without a shareholder vote, except for tax gross-ups provided pursuant to a plan, policy, or arrangement applicable to management employees of the company generally, such as relocation or expatriate tax equalization policy.

8.

Employee Stock Ownership Plans (ESOPs)

We vote for proposals that request shareholder approval in order to implement an ESOP or to increase authorized shares for existing ESOPs, except in cases when the number of shares allocated to the ESOP is "excessive" (i.e., generally greater than five percent of outstanding shares).

9.

Employee Stock Purchase Plans

a.

We vote for qualified plans where all of the following apply:

•

The purchase price is at least 85 percent of fair market value

•

The offering period is 27 months or less

•

The number of shares allocated to the plan is five percent or less of outstanding shares

If the above do not apply, we vote on a case-by-case basis.

b.

We vote for non-qualified plans where all of the following apply:

•

All employees of the company are eligible to participate (excluding 5 percent or more beneficial owners)

•

There are limits on employee contribution (ex: fixed dollar amount)

•

There is a company matching contribution with a maximum of 25 percent of an employee’s contribution

•

There is no discount on the stock price on purchase date (since there is a company match)

If the above do not apply, we vote against the non-qualified employee stock purchase plan.

10.

401(k) Employee Benefit Plans

We vote for proposals to implement a 401(k) savings plan for employees.

11.

Stock Compensation Plans

a.

We vote for stock compensation plans which provide a dollar-for-dollar cash for stock exchange.

b.

We vote on a case-by-case basis for stock compensation plans which do not provide a dollar-for-dollar cash for stock exchange using a quantitative model.

12.

Directors Retirement Plans

a.

We vote against retirement plans for non-employee directors.

b.

We vote for shareholder proposals to eliminate retirement plans for non-employee directors.

13.

Management Proposals to Reprice Options

We vote against management proposals seeking approval to reprice options.

14.

Shareholder Proposals Regarding Executive and Director Pay

a.

We vote against shareholder proposals seeking to set absolute levels on compensation or otherwise dictate the amount or form of compensation.

b.

We vote against shareholder proposals requiring director fees be paid in stock only.

c.

We vote against shareholder proposals to eliminate vesting of options and restricted stock on change of control.

d.

We vote for shareholder proposals to put option repricing to a shareholder vote.

e.

We vote for shareholder proposals that call for a non-binding advisory vote on executive pay (“say-on-pay”). Company boards would adopt a policy giving shareholders the opportunity at each annual meeting to vote on an advisory resolution to ratify the compensation of the named executive officers set forth in the proxy statement’s summary compensation table.

f.

We vote “annual” for the frequency of say-on-pay proposals rather than once every two or three years.

g.

We vote on a case-by-case basis for all other shareholder proposals regarding executive and director pay, taking into account company performance, pay level versus peers, pay level versus industry, and long term corporate outlook.

15.

Management Proposals on Executive Compensation

For non-binding advisory votes on executive officer compensation, when management and the external service provider agree, we vote for the proposal. When management and the external service provider disagree, the proposal becomes a refer item. In the case of a Refer item, the factors under consideration will include the following:

•

Company performance over the last 1, 3, and 5-year periods on a total shareholder return basis

•

Performance metrics for short- and long-term incentive programs

•

CEO pay relative to company performance (is there a misalignment)

•

Tax gross ups to senior executives

•

Change-in-control arrangements

•

Presence of a clawback provision, ownership guidelines, or stock holding requirements for senior executives

16.

Stock Retention / Holding Period of Equity Awards

We vote on a case-by-case basis on shareholder proposals asking companies to adopt policies requiring senior executives to retain all or a significant (>50 percent) portion of their shares acquired through equity compensation plans, either:

•

While employed and/or for one to two years following the termination of their employment; or

•

For a substantial period following the lapse of all other vesting requirements for the award, with ratable release of a portion of the shares annually during the lock-up period

The following factors will be taken into consideration:

•

Whether the company has any holding period, retention ratio, or named executive officer ownership requirements currently in place

•

Actual stock ownership of the company’s named executive officers

•

Policies aimed at mitigating risk taking by senior executives

•

Pay practices at the company that we deem problematic

I.

State/Country of Incorporation

1.

Voting on State Takeover Statutes

a.

We vote for proposals to opt out of state freeze-out provisions.

b.

We vote for proposals to opt out of state disgorgement provisions.

2.

Voting on Re-incorporation Proposals

We vote on a case-by-case basis on proposals to change a company's state or country of incorporation. Considerations include: reasons for re-incorporation (i.e. financial, restructuring, etc); advantages/benefits for change (i.e. lower taxes); compare the differences in state/country laws governing the corporation.

3.

Control Share Acquisition Provisions

a.

We vote against proposals to amend the charter to include control share acquisition provisions.

b.

We vote for proposals to opt out of control share acquisition statutes unless doing so would enable the completion of a takeover that would be detrimental to shareholders.

c.

We vote for proposals to restore voting rights to the control shares.

d.

We vote for proposals to opt out of control share cashout statutes.

J.

Mergers and Corporate Restructuring

1.

Mergers and Acquisitions

a.

We vote on a case-by-case basis on mergers and acquisitions. Considerations include: benefits/advantages of the combined companies (i.e. economies of scale, operating synergies, increase in market power/share, etc.); offer price (premium or discount); change in the capital structure; impact on shareholder rights.

2.

Corporate Restructuring

a.

We vote on a case-by-case basis on corporate restructuring proposals involving minority squeeze outs and leveraged buyouts. Considerations include: offer price, other alternatives/offers considered and review of fairness opinions.

3.

Spin-offs

a.

We vote on a case-by-case basis on spin-offs. Considerations include the tax and regulatory advantages, planned use of sale proceeds, market focus, and managerial incentives.

4.

Asset Sales

a.

We vote on a case-by-case basis on asset sales. Considerations include the impact on the balance sheet/working capital, value received for the asset, and potential elimination of diseconomies.

5.

Liquidations

a.

We vote on a case-by-case basis on liquidations after reviewing management's efforts to pursue other alternatives, appraisal value of assets, and the compensation plan for executives managing the liquidation.

6.

Appraisal Rights

a.

We vote for proposals to restore, or provide shareholders with, rights of appraisal.

7.

Changing Corporate Name

a.

We vote for proposals to change the “corporate name”, unless the proposed name change bears a negative connotation.

8.

Conversion of Securities

a.

We vote on a case-by-case basis on proposals regarding conversion of securities. Considerations include the dilution to existing shareholders, the conversion price relative to market value, financial issues, control issues, termination penalties, and conflicts of interest.

9.

Stakeholder Provisions

a.

We vote against proposals that ask the board to consider non-shareholder constituencies or other non-financial effects when evaluating a merger or business combination.

K.

Social and Environmental Issues

When considering environmental and social (E&S) proposals, we have an obligation to vote proxies in the best interest of our clients, considering both shareholder value as well as societal impact.

1.

Sustainability Reporting

a.

We vote for proposals seeking greater disclosure on the company’s environmental, social & governance policies and practices;

b.

We vote for proposals that would require companies whose annual revenues are at least $5 billion to prepare a sustainability report.  All others will be decided on a case-by-case basis.

2.

Diversity & Equality

a.

We vote for proposals supporting nomination of most qualified candidates, inclusive of a diverse pool of women and people of color, to the Board of Directors and senior management levels;

b.

We vote for proposals requesting comprehensive disclosure on board diversity;

c.

We vote for proposals requesting comprehensive disclosure on employee diversity;

d.

We vote for proposals requesting comprehensive reports on gender pay disparity;

e.

We vote for proposals seeking to amend a company’s EEO statement or diversity policies to prohibit discrimination based on sexual orientation and/or gender identity.

3.

Climate Risk Disclosure

a.

We vote for climate proposals seeking more disclosure on financial, physical or regulatory risks related to climate change and/or how the company measures and manages such risks;

b.

We vote for climate proposals requesting a report/disclosure of goals on GHG emissions from company operations and/or products;

4.

Case-by-case E&S proposals (examples)

a.

Climate proposals seeking company disclosure on GHG reduction targets and/or goals

b.

Animal welfare policies;

c.

Human rights and company policies;

d.

Operations in high-risk or sensitive areas;

e.

Product integrity and marketing.

L.

Miscellaneous

1.

Charitable Contributions

We vote against proposals to eliminate, direct or otherwise restrict charitable contributions.

2.

Political Contributions

We will vote in favor of non-binding proposals for reports on corporate lobbying and political contributions.

In general, we vote on a case-by-case basis on other shareholder proposals pertaining to political contributions. In determining our vote on political contribution proposals we consider, among other things, the following:

•

Does the company have a political contributions policy publicly available

•

How extensive is the disclosure on these documents

•

What oversight mechanisms the company has in place for approving/reviewing political contributions and expenditures

•

Does the company provide information on its trade association expenditures

•

Total amount of political expenditure by the company in recent history

3.

Operational Items

a.

We vote against proposals to provide management with the authority to adjourn an annual or special meeting absent compelling reasons to support the proposal.

b.

We vote against proposals to reduce quorum requirements for shareholder meetings below a majority of the shares outstanding unless there are compelling reasons to support the proposal.

c.

We vote for by-law or charter changes that are of a housekeeping nature (updates or corrections).

d.

We vote for management proposals to change the date/time/location of the annual meeting unless the proposed change is unreasonable.

e.

We vote against shareholder proposals to change the date/time/location of the annual meeting unless the current scheduling or location is unreasonable.

f.

We vote against proposals to approve other business when it appears as voting item.

4.

Routine Agenda Items

In some markets, shareholders are routinely asked to approve:

•

the opening of the shareholder meeting

•

that the meeting has been convened under local regulatory requirements

•

the presence of a quorum

•

the agenda for the shareholder meeting

•

the election of the chair of the meeting

•

regulatory filings

•

the allowance of questions

•

the publication of minutes

•

the closing of the shareholder meeting

We generally vote for these and similar routine management proposals.

5.

Allocation of Income and Dividends

We generally vote for management proposals concerning allocation of income and the distribution of dividends, unless the amount of the distribution is consistently and unusually small or large.

6.

Stock (Scrip) Dividend Alternatives

a.

We vote for most stock (scrip) dividend proposals.

b.

We vote against proposals that do not allow for a cash option unless management demonstrates that the cash option is harmful to shareholder value.

ClearBridge has determined that registered investment companies, particularly closed end investment companies, raise special policy issues making specific voting guidelines frequently inapplicable. To the extent that ClearBridge has proxy voting authority with respect to shares of registered investment companies, ClearBridge shall vote such shares in the best interest of client accounts and subject to the general fiduciary principles set forth herein without regard to the specific voting guidelines set forth in Section V. A. through L.

The voting policy guidelines set forth herein will be reviewed annually and may be changed by ClearBridge in its sole discretion.

VI.

OTHER CONSIDERATIONS

In certain situations, ClearBridge may determine not to vote proxies on behalf of a client because ClearBridge believes that the expected benefit to the client of voting shares is outweighed by countervailing considerations. Examples of situations in which ClearBridge may determine not to vote proxies on behalf of a client include:

A.

Share Blocking

Proxy voting in certain countries requires “share blocking.” This means that shareholders wishing to vote their proxies must deposit their shares shortly before the date of the meeting (e.g. one week) with a designated depositary. During the blocking period, shares that will be voted at the meeting cannot be sold until the meeting has taken place and the shares have been returned to client accounts by the designated depositary. In deciding whether to vote shares subject to share blocking, ClearBridge will consider and weigh, based on the particular facts and circumstances, the expected benefit to clients of voting in relation to the detriment to clients of not being able to sell such shares during the applicable period.

B.

Securities on Loan

Certain clients of ClearBridge, such as an institutional client or a mutual fund for which ClearBridge acts as a sub-adviser, may engage in securities lending with respect to the securities in their accounts. ClearBridge typically does not direct or oversee such securities lending activities. To the extent feasible and practical under the circumstances, ClearBridge will request that the client recall shares that are on loan so that such shares can be voted if ClearBridge believes that the expected benefit to the client of voting such shares outweighs the detriment to the client of recalling such shares (e.g., foregone income). The ability to timely recall shares for proxy voting purposes typically is not entirely within the control of ClearBridge and requires the cooperation of the client and its other service providers. Under certain circumstances, the recall of shares in time for such shares to be voted may not be possible due to applicable proxy voting record dates and administrative considerations.

VII.

DISCLOSURE OF PROXY VOTING

ClearBridge employees may not disclose to others outside of ClearBridge (including employees of other Franklin business units) how ClearBridge intends to vote a proxy absent prior approval from ClearBridge’s General Counsel/Chief Compliance Officer, except that a ClearBridge investment professional may disclose to a third party (other than an employee of another Franklin business unit) how s/he intends to vote without obtaining prior approval from ClearBridge’s General Counsel/Chief Compliance Officer if (1) the disclosure is intended  to facilitate a discussion of publicly available information by ClearBridge personnel with a representative of a company whose securities are the subject of the proxy, (2) the company’s market capitalization exceeds $1 billion and (3) ClearBridge has voting power with respect to less than 5% of the outstanding common stock of the company.

If a ClearBridge employee receives a request to disclose ClearBridge’s proxy voting intentions to, or is otherwise contacted by, another person outside of ClearBridge (including an employee of another Franklin business unit) in connection with an upcoming proxy voting matter, he/she should immediately notify ClearBridge’s General Counsel/Chief Compliance Officer.

If a portfolio manager wants to take a public stance with regards to a proxy, s/he must consult with ClearBridge’s General Counsel/Chief Compliance Officer before making or issuing a public statement.

VIII.

RECORDKEEPING AND OVERSIGHT

ClearBridge shall maintain the following records relating to proxy voting: 

•

a copy of these policies and procedures;

•

a copy of each proxy form (as voted);

•

a copy of each proxy solicitation (including proxy statements) and related materials with regard to each vote;

•

documentation relating to the identification and resolution of conflicts of interest;

•

any documents created by ClearBridge that were material to a proxy voting decision or that memorialized the basis for that decision; and

•

a copy of each written client request for information on how ClearBridge voted proxies on behalf of the client, and a copy of any written response by ClearBridge to any (written or oral) client request for information on how ClearBridge voted proxies on behalf of the requesting client.

Such records shall be maintained and preserved in an easily accessible place for a period of not less than six years from the end of the fiscal year during which the last entry was made on such record, the first two years in an appropriate office of the ClearBridge adviser.

To the extent that ClearBridge is authorized to vote proxies for a United States Registered Investment Company, ClearBridge shall maintain such records as are necessary to allow such fund to comply with its recordkeeping, reporting and disclosure obligations under applicable laws, rules and regulations.

In lieu of keeping copies of proxy statements, ClearBridge may rely on proxy statements filed on the EDGAR system as well as on third party records of proxy statements and votes cast if the third party provides an undertaking to provide the documents promptly upon request.

ClearBridge

Investments

Proxy Committee Terms

of Reference

March 2021

ClearBridge Investments Limited (CIL)

ClearBridge RARE Infrastructure International Pty Limited (CBI RIIPL)

ClearBridge RARE Infrastructure (North America) Pty Limited (CBI RINA)

(the above entities are referred to as “ClearBridge” for the purposes of this policy.

ClearBridge and ClearBridge Investments, LLC. are collectively referred to as

“ClearBridge Investments”.)

Document Owner: Head of Legal, Risk & Compliance

This document is confidential and is only intended for the purposes of the above entities. This document may only be provided to third parties with the express prior written approval of the Head of Legal, Risk & Compliance. No recipient is authorised to pass this document or its contents on to any other person whatsoever or reproduce it by any means. All intellectual property contained in this document remains the property of the above entities and any rights in relation to this intellectual property are not intended to be diluted by the distribution of this document.

Proxy Committee Terms of Reference

I.

Establishment of The Proxy Committee

The Proxy Committee (the “Proxy Committee” or the “Committee”) has been established for the purpose of monitoring to ensure that proxies are voted in the best interests of ClearBridge's clients and in accordance with the Proxy Voting Policy (the “Policy”).

II.

Meetings of The Committee

The Committee shall meet on a regular basis, but not less frequently than semi-annually.  Special meetings may also be held upon reasonable notice to the members of the Committee. An agenda shall be established for each meeting and minutes shall be kept. A minimum quorum of two voting members is required for each Proxy Committee meeting. The Committee may request any ClearBridge officer or employee or other interested persons to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. Meetings of the Committee may be held in person, by telephone or by other appropriate means.

III.

Reporting

The Chairperson shall regularly report the results of the Committee’s reviews and deliberations to ClearBridge’s Management Committee and make such recommendations as the Committee deems appropriate.

IV.

Responsibilities of the Proxy Committee

The Proxy Committee is responsible for:

1.

Approving any changes to the Policy.

2.

Reviewing the timeliness and accuracy of the proxies voted.

3.

Monitoring votes cast to ensure that they were voted in accordance with the Proxy Voting Policy. In furtherance of this responsibility, the Committee shall specifically review the following to assure that appropriate documentation exists to support the positions taken:

a)

Instances where a vote was contrary to a position taken in the Policy;

b)

Instances where a vote was against management recommendation;

c)

Instances were two or more portfolio managers voted opposite to each other, except in instances where conflicting votes were cast by the managers of the social awareness products.

4.

Resolving conflicts of interest in accord with the procedures set forth in the Proxy Voting Policy. At least one representative from each of Investment Management, Legal and Compliance must participate in any deliberations and decisions of the Proxy Committee relating to potential conflicts of interest.

5.

On an annual basis, reviewing the performance of the third-party vendor to assure that proxies are being voted and such votes are in accordance with ClearBridge’s directives. The Committee is also responsible for conducting a due diligence review of the third-party vendor organization, including such organization’s policies and procedures for addressing conflicts of interest.

6.

Approving any proposal to terminate/replace the third-party vendor.

In fulfilling its responsibilities, the Committee may rely on such reports as may be provided to the Committee by ClearBridge’s proxy administration personnel.

V.

Recording Keeping

Minutes of the meetings shall be maintained for a period of six years from the end of the fiscal year in which they were created.

Appendix A

Proxy Committee Members 
a/o March 2021

Members

Michael Kagan, Chairman

William Harnett, Secretary

Barbara Brooke Manning

Neal Austria

Mary Jane McQuillen

Stephanie Rubin

Tonya Gojani

tortoise Capital Advisors, L.L.C.

(THE “adviser”)

PROXY VOTING POLICIES AND PROCEDURES

1.

Introduction

Unless a client is a registered investment company under the Investment Company Act of 1940 or a client requests the Adviser to do so in writing, the Adviser does not vote proxy materials for its clients.  In the event the Adviser receives any proxies intended for clients who have not delegated proxy voting responsibilities to the Adviser, the Adviser will promptly forward such proxies to the client for the client to vote.  When requested by the client, the Adviser may provide advice to the client regarding proposals submitted to the client for voting.  In the event an employee determines that the Adviser has a conflict of interest due to, for example, a relationship with a company or an affiliate of a company, or for any other reason which could influence the advice given, the employee will advise the Chief Compliance Officer who will advise the applicable Investment Committee, and the Investment Committee will decide which of the procedures set forth in Section 3 below the Adviser will use.

In cases in which the client is a registered investment company under the Investment Company Act of 1940 or in cases where the client has delegated proxy voting responsibility and authority to the Adviser, the Adviser has adopted and implemented the following policies and procedures, which it believes are reasonably designed to ensure that proxies are voted in the best interests of its clients.  In pursuing this policy, proxies should be voted in a manner that is intended to maximize value to the client.  In situations where Adviser accepts such delegation and agrees to vote proxies, Adviser will do so in accordance with these Policies and Procedures.  The Adviser may delegate its responsibilities under these Policies and Procedures to a third party, provided that no such delegation shall relieve the Adviser of its responsibilities hereunder and the Adviser shall retain final authority and fiduciary responsibility for such proxy voting. If there are any differences between these policies and procedures and the proxy voting policies and procedures adopted by a registered investment company client, the policies and procedures of the registered investment company client will supersede these policies and procedures.

2.

General

a.Because of the unique nature of the Master Limited Partnerships (“MLPs”), the Adviser shall evaluate each proxy of an MLP on a case-by-case basis.  Because proxies of MLPs are expected to relate only to extraordinary measures, the Adviser does not believe it is prudent to adopt pre-established voting guidelines.

b.In the event requests for proxies are received with respect to the voting of equity securities other than MLP equity units, on routine matters, such as election of directors or approval of auditors, the proxies usually will be voted with management unless the Adviser determines it has a conflict or the Adviser determines there are other reasons not to vote with management.  On non-routine matters, such as amendments to governing instruments, proposals relating to compensation and stock option and equity compensation plans, corporate governance proposals and shareholder proposals, the Adviser will vote, or abstain from voting if deemed appropriate, on a case by case basis in a manner it believes to be in the best economic interest of its clients, and registered investment company clients’ shareholders.  In the event requests for proxies are received with respect to debt securities, the Adviser will vote on a case by case basis in a manner it believes to be in the best economic interest of its clients, and registered investment company clients’ shareholders.

c.The applicable Investment Committee of the Adviser, or a Managing Director of the Adviser designated by the Investment Committee as listed on Exhibit A hereto (the “Designated Managing Director”), is responsible for monitoring Adviser’s proxy voting actions and ensuring that (i) proxies are received and forwarded to the appropriate decision makers; and (ii) proxies are voted in a timely manner upon receipt of voting instructions.  The Adviser is not responsible for voting proxies it does not receive, but will make reasonable efforts to obtain missing proxies.

d.The applicable Investment Committee of the Adviser, or the Designated Managing Director, shall implement procedures to identify and monitor potential conflicts of interest that could affect the proxy voting process, including (i) significant client relationships; (ii) other potential material business relationships; and (iii) material personal and family relationships.

e.All decisions regarding proxy voting shall be determined by the applicable Investment Committee of the Adviser, or the Designated Managing Director, and shall be executed by a the Designated Managing Director or another portfolio team Managing Director of the Adviser or, if the proxy may be voted electronically, electronically voted by any such Managing Director of the Adviser or his designee, including any of the individuals listed on Exhibit A hereto. Every effort shall be made to consult with the portfolio manager and/or analyst covering the security.

f.The Adviser may determine not to vote a particular proxy, if the costs and burdens exceed the benefits of voting (e.g., when securities are subject to loan or to share blocking restrictions).

3.

Conflicts of Interest

The Adviser shall use commercially reasonable efforts to determine whether a potential conflict may exist, and a potential conflict shall be deemed to exist only if one or more of the members of the applicable Investment Committee of the Adviser actually knew or should have known of the conflict.  The Adviser is sensitive to conflicts of interest that may arise in the proxy decision-making process and has identified the following potential conflicts of interest:

·

A principal of the Adviser or any person involved in the proxy decision-making process currently serves on the Board of the portfolio company.

·

An immediate family member of a principal of the Adviser or any person involved in the proxy decision-making process currently serves as a director or executive officer of the portfolio company.

·

The Adviser, any venture capital fund managed by the Adviser, or any affiliate holds a significant ownership interest in the portfolio company.

This list is not intended to be exclusive.  All employees are obligated to disclose any potential conflict to the Adviser’s Chief Compliance Officer.

If a material conflict is identified, Adviser management may (i) disclose the potential conflict to the client and obtain consent; (ii) establish an ethical wall or other informational barriers between the person(s) that are involved in the conflict and the persons making the voting decisions, (iii) abstain from voting the proxies; or (iv) forward the proxies to clients so the clients may vote the proxies themselves.

4.

Recordkeeping

The applicable Investment Committee of the Adviser, or personnel of the Adviser designated by the Investment Committee as listed on Exhibit A hereto, are responsible for maintaining the following records:

·

proxy voting policies and procedures;

·

proxy statements (provided, however, that the Adviser may rely on the Securities and Exchange Commission’s EDGAR system if the issuer filed its proxy statements via EDGAR or may rely on a third party as long as the third party has provided the Adviser with an undertaking to provide a copy of the proxy statement promptly upon request);

·

records of votes cast and abstentions; and

·

any records prepared by the Adviser that were material to a proxy voting decision or that memorialized a decision.

Please see the separate proxy voting policies and procedures for the Tortoise St. Louis team which makes separate and independent decisions from the other Adviser investment teams.

Revised effective as of August 25, 2020

Exhibit A

Managing Director of the Adviser Designated by Investment Committee (“Designated Managing Director”)

Each of the following is a “Designated Managing Director” and may act individually as such for purposes of these Proxy Voting Policies and Procedures

Brian Kessens

James Mick

Matt Sallee

Rob Thummel

Nick Holmes

Stephen Pang

Designees for Electronic Voting of Proxies

Rob Thummel

Matt Sallee

James Mick

Brian Kessens

Braden Cielocha

Nick Holmes

Brett Castelli

Any other individual designated by one or more of the Designated Managing Directors

Designated Personnel for Record Keeping

Chief Compliance Officer, or his or her designee

SMA Operations team

Exhibit A amended effective as of August 25, 2020

ITEM 8 – PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES

This section contains information about the Registrant’s portfolio managers and the other accounts they manage, their compensation, and their ownership of securities of the Registrant. "Ownership of Securities" information reflects a portfolio manager’s beneficial ownership, which means a direct or indirect pecuniary interest.

Information in this section is as of March 31, 2022, unless otherwise noted.

(a)(1)

Jessica S. Bush has been with Principal® since 2006. Ms. Bush is responsible for the asset allocation and manager selection for Principal® Global Asset Allocation. Ms. Bush earned a bachelor’s degree in Business Administration from the University of Michigan. She has earned the right to use the Chartered Financial Analyst designation.

Marcus W. Dummer has been with Principal® since 2003. Mr. Dummer is responsible for the asset allocation and manager selection for Principal® Global Asset Allocation. Mr. Dummer earned a bachelor’s degree in Finance and an M.B.A. from the University of Utah. He has earned the right to use the Chartered Alternative Investment Analyst designation.

Benjamin E. Rotenberg has been with Principal® since 2014. Mr. Rotenberg is responsible for the asset allocation and manager selection for Principal® Global Asset Allocation. Mr. Rotenberg earned a bachelor’s degree in International Relations and Russian from Pomona College. He has earned the right to use the Chartered Financial Analyst and the Chartered Alternative Investment Analyst designations.

May Tong has been with Principal® since 2021. Prior to that, Ms. Tong was a Senior Vice President, Portfolio Manager for Franklin Templeton Multi-Asset Solutions since 2018. Prior to that, Ms. Tong was a Portfolio Manager and Head of Portfolio Implementation and Management for Voya Investment Management’s Multi-Asset Strategies and Solutions Team since 2011. Ms. Tong is responsible for the asset allocation and manager selection for Principal Global Asset Allocation. She earned a bachelor’s degree in Accounting and Finance from Boston College and an M.B.A. from Columbia University. She has earned the right to use the Chartered Financial Analyst designation.

(a)(2)

The following table provides information relating to other accounts managed by the Registrant’s portfolio managers disclosed in (a)(1) above.

Other Accounts Managed
			Number of	Total Assets of the
Principal Diversified Select Real Asset Fund	Total Number	Total Assets in the	Accounts that Base the Advisory Fee on	Accounts that Base the Advisory Fee on
	of Accounts	Accounts	Performance	Performance
Jessica S. Bush
Registered investment companies	4	$9.7 billion	0	$0
Other pooled investment vehicles	1	$1.8 billion	0	$0
Other accounts	3	$4.8 million	0	$0
Marcus W. Dummer
Registered investment companies	4	$9.7 billion	0	$0
Other pooled investment vehicles	1	$1.8 billion	0	$0
Other accounts	3	$4.8 million	0	$0
Benjamin E. Rotenberg
Registered investment companies	4	$9.7 billion	0	$0
Other pooled investment vehicles	1	$1.8 billion	0	$0
Other accounts	3	$4.8 million	0	$0
May Tong
Registered investment companies	4	$9.7 billion	0	$0
Other pooled investment vehicles	1	$1.8 billion	0	$0
Other accounts	0	$0	0	$0

Portfolio managers at PGI and the sub‑advisers typically manage multiple accounts. These accounts may include, among others, mutual funds, proprietary accounts, and separate accounts (assets managed on behalf of pension funds, foundations, and other investment accounts). The management of multiple funds and accounts may give rise to potential conflicts of interest if the funds and accounts have different objectives, benchmarks, time horizons, and fees. In addition, the side-by-side management of these funds and accounts may raise potential conflicts of interest relating to cross trading, the allocation of investment opportunities, and the aggregation and allocation of trades. PGI seeks to provide best execution of all securities transactions and aggregate and then allocate securities to client accounts in a fair and timely manner. To this end, PGI has developed policies and procedures designed to mitigate and manage the potential conflicts of interest that may arise from side-by-side management.

(a)(3)

PGI offers investment professionals a competitive compensation structure that is evaluated annually relative to other global asset management firms to ensure its continued competitiveness and alignment with industry best practices. The objective of the structure is to offer market competitive compensation that aligns individual and team contributions with firm and client performance objectives in a manner that is consistent with industry standards and business results.

Compensation for investment professionals at all levels is comprised of base salary and variable incentive components. As team members advance in their careers, the variable component increases in its proportion commensurate with responsibility levels. The variable component is designed to reinforce delivery of investment performance, firm performance, team collaboration, regulatory compliance, operational excellence, client retention and client satisfaction. Investment performance is measured on a pretax basis against relative client benchmarks and peer groups over one year, three-year and five-year periods, calculated quarterly, reinforcing a longer‑term orientation.

Payments under the variable incentive plan are delivered in the form of cash or a combination of cash and deferred compensation. The amount of incentive delivered in the form of deferred compensation depends on the size of an individual’s incentive award as it relates to a tiered deferral scale. Deferred compensation is required to be invested into Principal Financial Group (“PFG”) restricted stock units and funds managed by the team, via a co-investment program. Both payment vehicles are subject to a three‑year vesting schedule. The overall measurement framework and the deferred component are well aligned with our desired focus on clients’ objectives (e.g., co-investment), alignment with Principal stakeholders, and talent retention.

In addition to deferred compensation obtained through their compensation programming, team members have investments acquired through their participation in PFG’s employee stock purchase plan, retirement plans offered by the Principal (e.g., 401(k) plan), and direct personal investments. It should be noted that the Company’s retirement and deferred compensation plans generally utilize its non‑registered group separate accounts or commingled vehicles rather than the traditional mutual funds. In each instance, however, these vehicles are managed in lockstep alignment with the mutual funds.

(a)(4)   The portfolio managers disclosed in (a)(1) above own shares of the Registrant as follows:

Portfolio Manager	Dollar Range of Securities Owned by the Portfolio Manager
Jessica S. Bush	$50,001 - $100,000
Marcus W. Dummer	None
Benjamin E. Rotenberg	None
May Tong	None

(b)        Not applicable.

ITEM 9 – PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS

Not applicable.

ITEM 10 – SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 11 – CONTROLS AND PROCEDURES

a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing).

(b) There have been no changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

ITEM 12 – DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not applicable.

ITEM 13 – EXHIBITS

(a)(1) Code of Ethics required to be disclosed under Item 2 of Form N-CSR attached hereto as

Exhibit 99.CODE ETH.

(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940 are attached hereto as

Exhibit 99.CERT.

(b) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(b) under the Investment Company Act of 1940 is attached hereto as

Exhibit 99.906CERT

.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) Principal Diversified Select Real Asset Fund

By /s/ Kamal Bhatia

              Kamal Bhatia, President and CEO

Date 5/10/2022

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By /s/ Kamal Bhatia

              Kamal Bhatia, President and CEO

Date 5/10/2022

By /s/ Michael Scholten

              Michael Scholten, Chief Financial Officer

Date 5/10/2022

[1]

The first such interval fund is the Principal Diversified Select Real Asset Fund; Management, subject to Board approval, may create others, each of which would be formed as a separate trust.

[2]

Especially in the case of an apparent, as opposed to actual, conflict of interest, the Proxy Committee may resolve such conflict of interest by satisfying itself that ClearBridge’s proposed vote on a proxy issue is in the best interest of client accounts and is not being influenced by the conflict of interest.